What Your Auto Insurer Doesn't Want You to Know

Selecting the best car insurance requires a solid knowledge base about the auto insurance industry and its major players. It's difficult to select the best policy when you don't know the ins and outs of the auto insurance world. In what follows, we'll explain a few secrets that most car insurers don't want you to know.

1. Your vehicle model impacts your premiums. Even the best car insurance company won't tell you that they have a rating system for every vehicle make and model in existence. The rating system assigns a number based on the price of the car and theft and safety data. The higher your vehicle's number, the more you will pay in premiums.
2. Pay your entire premium at once to save. Auto insurers typically offer several different payment options. Usually, the best auto insurance companies allow you to either pay your annual or semi-annual premium in full or pay it in monthly installments. What your insurer might not disclose, however, is that they typically charge a "fractional premium" fee when you choose to pay your premiums over time rather than in a lump sum.
3. The contents of your vehicle are not covered by your policy. If you have CDs, electronics, car stereo equipment, or other valuable items in your vehicle, your auto policy will not cover them if they are stolen or if your vehicle is stolen. A car insurance policy protects the vehicle only, not the contents. However, the best car insurance providers offer an optional coverage that will protect CDs, sound systems, and other items in your vehicle for a higher premium. Typically, though, the contents of your vehicle are protected by your home or renters insurance policy, not your auto policy.
4. Accidents will cost you dearly. Although the best car insurance company may forgive your first accident, the standard practice in the industry is to raise a policyholder's premiums by 40 percent after his/her first at-fault accident. For instance, if you currently pay a premium of $400 per year and have an accident, your new premium would be $560, which is not exactly a negligible difference.
5. Policyholders with good credit pay less. Car insurers are now required to let you know that they perform credit checks on you before issuing a policy and periodically thereafter. However, they won't be so eager to tell you that people with spotless credit histories will pay substantially less for the best car insurance than someone with a few credit problems, no matter how minor.