WHAT TO CONSIDER BEFORE CHANGING AUTO INSURANCE COMPANIES

BYALAN PLAFKER, PRESIDENT & CEO
MEMBER BROKERAGE SERVICE LLC
A MELROSE CREDIT UNION SERVICE ORGANIZATION

Some customers have been prompted by TV commercials or mass mail advertisers to consider switching their automobile insurance. Before saying “yes” to one of these propositions we hope you will consider the following:

What do you know about this company?

Not all auto insurance companies are alike. Some support local, independent insurance agencies to help with all your insurance questions or problems. Some put their resources into advertising campaigns and are accessible to you only by an 800 number, and chances are you will never deal with the same individual twice.

Are they really offering you the same protection?

Not necessarily. It’s easy for salespeople to quote you a lower price if they don’t give you the same amount of coverage. We often find when looking at the details of these quick quote offers that the protection you and your family need is often compromised as a way of lowering your costs. New York state drivers can pick from literally hundreds of policy combinations consisting of various coverage and limit options. For your own protection, please let your agency go over the details of any offer you receive before accepting it. Your insurance agency can offer this beneficial analysis at absolutely no cost to you.

Who will go to bat for you if you have a claim?

Your agent will. Customers who have had a claim against their auto policy know an agent provides personal attention during this stressful time. They make sure you get the quickest, most convenient service, and answer all your questions. They also make sure you get every penny that’s coming to you. In short, they stand behind the coverage they sell you and the companies they represent. Are you sure you would get the same level of personal contact and concern from a mass
market insurer?

What could their offer cost you?

There could be hidden costs to you that the company won’t disclose until it’s too late. For example, you currently may be receiving a discount on your homeowners policy if it’s from the same company as your auto insurance. By switching you can lose that discount. An even greater danger these companies won’t tell you about is their right to cancel your coverage within the first 60 days even if you have accepted their offer and paid the premium. Mass market companies tend to take your money first then check your driving, claims and credit history later. If they see something they don’t like they may cancel your policy. A cancellation on your record can make it harder and more expensive to get coverage from another insurance company.

Who knows you best?

Your Professional Independent Agent does! They take the time to get to know their customers. Your auto insurance coverage has been crafted with your complete financial picture, your driving and claims history and your family circumstances in mind. There’s no way a stranger can reach that level of understanding from a brief phone call or impersonal application form. They want to keep you as their customer. If you receive an offer that’s “too good to be true,” it just might be. Before you say yes let your agent look over the fine print.

Do you have any control over auto insurance premiums?

In today’s market, where affordable personal auto insurance seems less and less available, you may wonder if there’s any way to control rising premiums. You should have an independent insurance agent, representing multiple companies, give you the right insurance to fit your needs. Besides choosing the right insurance company, here are some other tips to help you control the rates you pay for auto insurance:

• Driving record - An operator’s driving history affects rates and could predict future claims activity.Obeying the rules of the road and driving defensively are your best ways to lower premiums.
  
  
  
• Type of vehicle - A major factor in the rating of the coverages that pay to repair your car is the vehicle you own. In assigning a rate, most insurance companies begin with the cost of the vehicle and the model year. Generally, the higher the cost of the vehicle and the newer it is the higher the rate. However, further adjustments are made for the vehicle’s weight, body type, engine performance, actual loss experience from past years for that model, etc. Get a premium comparison for vehicles you are considering purchasing or leasing which will give you some control over the cost of your insurance.
  
  
  
• Coverage - Some people prefer to assume more of the risk of loss on their autos and save on premiums. It may make sense for you to remove coverages on older vehicles, or increase your deductibles on newer vehicles. A common rule of thumb is that for vehicles more than 10 years old many insurance companies do not cover them for other-than-collision (or comprehensive) or collision coverage (physical damage). However, to obtain glass coverage on a vehicle you would have to have other than collision coverage.
  
  
  
• Use and residence - Your employment opportunities and lifestyle most likely will dictate the kind of use your vehicles get and the location at which they are garaged—two things that impact your premiums. However, there is a way you can gain some control over the rating of your vehicles. You may want to consider driving the lowest rated vehicle. For example, insuring an older vehicle without physical damage coverage for activities that have the highest rate for use as a business use or long distance commuting to work.
  
  
  
• Timely premium payment - Always pay your premiums on time. Issuing cancellations, processing late payments and then issuing reinstatements, add significant costs to the servicing of auto insurance policies. Some companies have a low tolerance for late payments under policies that are
  eligible for their preferred pricing.
  
  
  
• Credit management - Many insurance companies have established a link between a person’s credit history and that person’s probability of having a car accident. As strange as this may sound, there appears to be an objective basis for using credit analysis known as insurance credit scores to predict which policy holders will have greater than average loss experience or less than average loss experience. Managing your credit and your credit report will help to lower rates on your auto insurance.
  
  
  
• Discounts - There are some standard discounts such as those for:
  

  — taking a driver training course or a defensive driving course,
  

  — qualifying as a good student,
  

  — insuring multiple vehicles on the same policy,
  

  — installing certain anti theft devices, and
  

  — maintaining certain safety equipment, for example,
  

  1. passive restraints,
  

  2. anti-lock brakes, or
  

  3. good student discounts.
  

Some insurance companies have developed their own discounts for such things as buying your homeowners policy from the same company. Your agency would like you to take advantage of every discount that is available to you so don’t hesitate to call for a discount review.

• Fight fraud - Lawmakers are working on bills that would help prevent fraud. If you are concerned about your auto insurance costs be sure to contact your state legislators and urge them to reach agreement on reforms that will drive the cost of fraud out of the state’s auto insurance system.
  

For more information, talk to your financial professional, or the author of this article.

Your Professional Insurance Agent …
We want you to know about the insurance you’re buying.

Alan Plafker, CPIA is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a Certified Professional Insurance Agent and licensed Insurance Broker. He serves as First Vice President on the Board of Directors the PIANY (Professional Insurance Agents Association of NY), serves on the Board of CIBGNY (Council of Insurance Brokers of Greater NY), and serves as Treasurer for the New York Independent Livery Driver Benefit Fund Board of Directors. His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 Ext. 1082, or visit the website at: www.MemberBrokerage.com