Budget Car Insurance and Direct Car Insurance – 10 Things You Should Know Before Applying

Getting car insurance online from budget car insurance companies is becoming more and more popular, for its competitive price, convenience in getting quotes and applying online directly. Having car insurance is vital for all car owners and drivers, the incentive in having a relatively lower price from direct car insurance companies thus have attracted huge audience.

Yet, you might wonder why these direct auto insurance companies can offer a lower quote than other insurance companies, or if they would be able to provide sufficient insurance coverage, etc…

Here are the top 10 things that you should know before applying for a cheap car insurance online.

1. Find out if the Company is Legitimate

This is the most important thing that you should know – whether the company is legitimate or not – before you apply for anything from them. Online budget vehicle insurance companies are blossoming nowadays and some people just misused the concept to achieve some other goals, such as getting your personal info like full name, credit card details, address, etc, via your online application.

Do a comprehensive research online by Googling the name of the online insurance company, or search for customer reviews of the company. The key thing is the comprehensiveness of your research, as there can be fake reviews written by the illegitimate scammers.

2. Understanding Scope of Insurance Coverage

Almost all of the ‘basic’ packages from direct auto insurance are really ‘basic’, which means a basic plan covers the mandatory lawful requirements. That’s also why the basic fee for these plans can be bit lower than tradition car insurance plans. Pay attention to which ‘law’ the insurance plan adheres. For instance, the basic requirement of car insurance in law deviates from state to state in the U.S.. Pay attention if you are still covered by basic coverage if you are driving across states.

3. Understanding Types of Insurance Plans

Since most ‘basic’ insurance plans only covers lawful required items, like other insurance plans, you would be able to find loads of ‘extra’ packages available on top of the basic plan, like comprehensive and collision plans or personal life insurance, just to name a couple.

Ask yourself what exactly you need and understand in details if the plans can cover your needs.

4. Get Quotes for all Applicable Coverage Plans

The financial incentive of a low insurance fee often attracts people to go further into the online application procedure, and only realize at a later stage that they need to pay more for extra coverage. Make sure you get quotes for all plans and sum them up, that would be your actual quote for your car insurance.

5. Get Quotes from Multiple Budget Car Insurance Websites Comparing prices is always a smart act for consumers. When you have a summed-up quote from various websites, compare their price and coverage and find out which suits you the best. Different budget car insurance company might have different terminologies in their insurance plans and you should be aware of that. At the end of the day, it is your needs that determine which policy to subscribe to.

6. Contract Timeline & Renewal Procedure

Most budget insurance quotes you a ‘monthly’ fee, which looks logically lower than an annual fee. Check carefully if the online car insurance company would require a monthly pay or a lump-sum annual payment.

Another thing is if the contract is counted monthly or annually – meaning you need to pay attention if the contract would be ended in a year or 2 years, and how would contracts be renewed. Would they give you notification or the contract renewal, or do you need to ask for it, and if you would be automatically debited for a contract renewal without notice?

You should know all these before your money has gone out of your account without noticing.

7. Flexibility of the Insurance Policy

Increasing the insured amount or adding new insurance plans on top are always welcomed by insurance companies. However, when you want to change to a lower-amount plan, you might encounter restrictions or have to go through complicated procedures. Read carefully in the conditions or call the company directly to understand the flexibility of the car insurance before your application.

8. Cancellation Policy

Nobody likes losing customers and therefore cancellation procedure of some insurance plans can be tedious. Understanding the cancellation policy is very important, as most plans required a month’s cancellation notification in advance, or some other restriction applies if you want to cancel your subscriptions.

9. Payment Method

Now you’ve understand the details of a budget auto insurance plan and decided to go for it. You should then understand the payment methods that the insurance company accepts, and if they incur extra service costs in particular payment methods or if you can get extra discount via some payment methods etc.

10. Claims Procedure

Check careful how the claiming process works with the direct auto insurance company before you apply for it. Very often discontents between car owners and insurance company appear when you need to make a claim. You should also pay attention to the available contacting methods for a claim or for urgent assistance.

In Short…

Afterall, a budget car insurance that allows you to have online quotes is very handy and is economically attractive. As a smart consumer, all you need to do is to get in-depth details before you apply for a direct car insurance online. All online direct car insurance companies have customer hotlines that you can ask for as much details as possible.

So bear in mind the above tips and get an inexpensive automobile insurance online smartly.

The Role of Car Insurance Brokers

The role of a car insurance broker is to act as an intermediary between the customer and the underwriting Insurance Company. Within this role there are various functions that they carry out in interaction both with the car insurance buying public and the Insurer with who they place the business.

When a broker places car and motor insurance risks on cover, their role has a major difference to other types of insurance in that the spread of risk is smaller. This is because a very high proportion of motor business is eventually placed on the basis of ‘one risk, one underwriter’ – that is to say, a Lloyd’s underwriter or Motor Insurance company.

When a member of the public goes to a motor insurance broker they expect that the broker should be fully aware of all the covers available and offered in a standard car insurance policy and a commercial motor policy. A broker also should be knowledgeable about the differences in policies and prices offered by the various Insurance Companies and underwriters with which his brokerage does business.

The Car Insurance Brokers role does not just stop with the supplying and purchasing of the insurance. They should be available to act as an intermediary with the Insurer at any time, acting upon the client’s behalf should there be any changes to the policy mid-term of the contract period, or to deal with any claims that need to be made.

The two main insurance areas dealt with by the car insurance broker are the private individual’s motor policy and the commercial fleet motor policy.

A marked tendency in the large broking house during recent years has been to concentrate more and more on the commercial motor insurance fleet placings, and less and less on the private sector of the market.

Many large international insurance brokers view the private motor insurance as uneconomic for a fully sustainable business, and so specialist sub-brokers or large provincial and regional brokers are dealing with a greater proportion of this class of motor business.

Car Insurance Brokers receive commissions for their role as intermediaries which are received from the Insurance companies with which the business is placed. The commissions available in the motor market varies somewhat and the recent ‘soft market’ where premiums and commissions are low, have also led the high street insurance broker to seek more profitable business in insurance classes other than Motor. Commissions for a car insurance policy may range from 7½ per cent to 20 per cent although with commercial vehicle contracts and large fleet business, brokerage may be agreed on a fee basis which is often charged over the whole portfolio for that particular client. In the past a standard rate or tariff which was agreed and reviewed by the Association of British Insurers professional body (ABI) was used in the UK car insurance market. This is no longer the case, but this approach still influences some underwriters in some specialist car insurance areas.

In recent years, however, many larger brokers have developed what is known as a ‘direct dealing account’. This is where the broker introduces a sub-broker to underwriters and then permits him to deal directly with them under a fronting agreement with their own marketing. The accounts, however, will still pass through the main broker. The commission is split between the main broker and the sub-broker, with the sub-broker usually commanding the higher percentage. An important restriction applied to the sub-broker within the fronting agreement is that he must pass the premium on to the main broker within 30 days of inception of the risk.

The role of the motor broker has changed somewhat in recent years with the development of Internet based quotation systems.

In particular the insurance comparison websites who have taken over the role of the broker to some extent. These quotation systems have been used successfully however by some car insurance brokers who have adapted and embraced the technology and now offer full on-line comparison quotes from their panels of insurance providers. The benefits are a very quick service, although it may still be advantageous for the broker to ‘shop around’ for the best deal for one’s client, particularly if the cover is for a non standard driver or car.

Whatever the changes in the technologies and methods of Car Insurance delivery there will always be clients who want a human face and to talk to someone directly about their insurance needs. The role of the broker is ultimately communication.

3 Car Insurance Basics

Trying to understand the ins and outs of car insurance is a tricky undertaking. This is no coincidence as insurance companies deliberately make policies complex in order to ensure that they have a number of escape clauses that could save them the cost of paying out claims. An insurance broker is an insurance professional who can help explain the details of a specific car insurance policy to you, but there are also more general snippets of information that can help you secure the right insurance.

Do not ignore the add-ons

Most car insurance policies come with optional cover items like roadside assistance, replacement car rental and gap cover. These add-ons typically do not cost much more than the base cover, but could save you a lot of money. For example, if you have an accident and your car is unavailable for a week while repairs are being done, you will need to find alternative means of transport for that period. If you do not have another vehicle and using public transport is not an option, then you will need to pay for a rental car. The cost of a rental car for one week could be almost as much as six month’s worth of car insurance premiums. Paying a little more could save you a lot in the future.

Prices vary from company to company

Just like with any other product or service, unless one company has a monopoly, insurance premiums will vary from insurer to insurer. Car insurance is a highly competitive business and insurers provide different types of policies and different levels of service. Some insurance companies target specific groups like the women-only type insurers. They provide discounted insurance policies to these groups in order to attract them as clients. The important thing to do is to shop around. Getting insurance quotes from various insurers has become easy since the advent of the insurance quote comparison websites. A traditional insurance broker will also be able to source comparative quotes for you.

Your car’s profile affects your premium

Insurance companies collect and compile vast amounts of data about you and your vehicle in order to accurately assess your risk. The model of car you drive carries its own set of data which insurance companies use to determine premiums. Accident statistic data is one example. The number and frequency of accidents involving your car model will be used by insurance companies to determine your premium. Another example is if you drive a relatively cheap vehicle model, but it is not very popular and replacement parts for it are expensive then your insurance company will charge you a higher premium. Also, if you drive a car that is extremely safe and protects occupants in accidents then your insurance company will give you a lower premium. Crime data is collected by insurers for various car models and the risk of theft is calculated in order to determine your premiums. All of these factors and more are used to profile the vehicle you want to insure and set your premiums.

So how is knowing this useful to you? Well before you buy your next car, do some research and get quotes for all the models in which you are interested. It will give you a good idea of which models are cheaper to insure. This may influence your decision of which one to buy.