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6 steps to better, cheaper car insurance

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If you're happy with your company and coverage, but just want a lower premium, consider raising the deductibles on your current policy. You'll have higher out-of-pocket expenses if you have to file a claim, but you can budget a lower cost of insurance if you remain accident-free.

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Even if you find a better deal elsewhere, remember that leaving one insurance company for another has its own risks. For example, policyholders who switch companies may lose longevity benefits.

"We give continuous service discounts," says Jones. Those discounts wouldn't apply if you were a new customer with a new insurer.

In addition, long-term clients with Jones' company who have clean driving records are more likely to be "forgiven" after a claim, so they wouldn't face premium penalties.

"If that same customer switched policies, then had that same claim, they probably would have a surcharge (at their policy's renewal)," Jones says.

Make apples-to-apples comparisons
Before searching for a better deal, understand exactly what you have with your current insurer.

"People often ask me for a quote on a new policy, so I'll ask them, for example, what their current bodily injury liability limits are," says Jones. "Their answer is usually, 'I don't know.'"

In such instances, Jones asks potential clients to pull out their declarations page and read the information to him. The declarations page, located at the front of the written automobile policy, summarizes the main parts of your plan. It includes the policy term, a description of the vehicles covered, the policy number and coverage limits.

Once you understand your current coverage limits, make sure that quotes from potential new providers are based on the same limits and deductibles. That way, you'll get an accurate cost comparison between the old and new policies.

"I have one client who considered switching to another company because they quoted a lower rate, but it was because her coverage limits would be lower," says Frank.

She says that under the new policy, the property damage coverage for the customer's automobile would have been just $50,000.

"But she had a Mercedes," Frank says. "I reminded her that cars like hers are worth $90,000. If her car was totaled, her insurer would only be able to pay off $50,000.

"The customer changed her mind about switching."

Of course, some insurers will be able to offer lower premiums for truly comparable coverage, because rates vary between companies. In such cases, switching providers is likely worth it.

Next: "Be aware of the risk of a rate increase. ..."
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