How to make a claim on your auto insurance?

When should you claim on your auto insurance? How should you go about applying for cover from your auto insurance? These questions are vital if you want to use your car insurance which is after all why you bought it. Many people view auto insurance as a necessary evil in order to be able to drive. It is much more than that, it can save your bacon when you have suffered an accident and you are under fire from those involved in the accident. This is especially the case if you were at fault in the accident.

When should you claim on your auto insurance?

1) You should claim when your auto insurance covers the claim you are making. As you know car insurance as all kinds of insurance have clauses and fine print which often qualify the coverage the insurance company provides. Before you make your claim re-read the insurance policy and make sure your insurance covers the damages you caused or received. For instance, heaven forbid it, but if you were driving under the influence of alcohol when an accident occurred you auto insurance might very well not cover your claim. You might be without cover if you were driving outside your country without contracting extra auto insurance. As you can see it is very important to understand what you are covered for and what you aren’t insured for as it could mean the difference from having to undergo some paperwork and mild discomfort and economic disaster and even bankruptcy.

2) You cannot claim from your insurance if the cost of the claim is lower or equal to your deductible. A deductible is a cap you place on your auto insurance coverage to reduce the cost of the premiums. What deductibles do is share the risk of insurance between you and the auto insurance company. The deductible can be set at any level, 100 dollars, 1,000 dollars or higher. This will mean that the first 100, 1,000 dollars or whatever amount you decided as your deductible will be paid by you, anything over and above might be covered by the auto insurance company.

3) Even if you are covered by your auto insurance and the cost is above your deductible it still might not be worth your time or money to claim. This is so when the cost of the claim is only marginally larger than the deductible but will affect your no claim bonus, increasing your next year’s auto insurance premium.

In every case it is a good idea to contact your broker. He is your friend in these matters because he / she is highly motivated to keep you as a happy customer. Auto insurance brokers like all insurance brokers receive residual commission every time you renew your auto insurance. If you are unhappy with your auto insurance company and cancel your coverage y0ur broker loses his commission. He / she cannot authorise your claim approval but he can help you make the right moves to increase your chances of getting your claim approved.

Smart ways to save money on auto insurance.

Saving money on insurance is seen by many a specialty skill much like wine tasting and quantum physics. The truth is that anyone can save money on their car insurance. Actually, I challenge you not to save money on your car insurance by carrying out the suggestions this article includes.

The first step to save money on your car insurance is to understand how car insurance works.

When you buy car insurance policy it is like you are buying a lottery ticket. It is likely that they will never to claim any large amount from the insurance. But the chance does exist. Now would you expect a lottery that has hundreds of numbers to be the same price as a lottery that has thousands of numbers if the prize was of the same amount? Of course not. We know that the larger the jackpot and the smaller the pool of “players” the more expensive “playing” is. This is a simple example of the effects of probability on a business situation.

Not surprisingly car insurance companies, and any insurance company for that matter, don’t like playing the lottery with their investment. That is why they calculate the odds of having to pay a jackpot to any of their customers. The more likely a customer is to claim from the insurance the riskier he is and the pricier his policy premium is going to be. How can you save on your car insurance? There are two main strategies:

1) Lower the jackpot, make your potential claim less risky.

Following our lottery illustration we should expect to pay less or more for a lottery ticket depending on the prize you are “playing” for. If the prize is a “scooter” or a Ferrari Testarrosa the price of the ticket will reflect it. You can lower the cost of your claim by reducing your coverage in areas you don’t need.  For instance :

- If you already carry medical coverage why include it in your car insurance. Or if you do, why not reduce it?

- If your car is not very expensive, lower than 2,500$ it might be more expensive to pay insurance than the actual risk of total loss. A good solution is to limit coverage on the damages to the car and keep your liability coverage. This can actually reduce your premium from 40 to 60 per cent without affecting your coverage if you have a BIG accident and are liable to paying compensation.

2) The other method to save your money is to lower the risk you pose as a client. If we follow our illustration it would be like increasing the number of players in a lottery. The chances of winning fall and so should the price of the ticket. You can do this by:

- Being a safer driver. Take special courses to increase your skills.

- Buying safety features on your car like ABS and anti-theft devices.

- Live in an area where crime is low.

- Having a good driving record.

These are smart ways of saving money on your auto insurance every one can carry out with little or no effort.