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6 steps to better, cheaper car insurance

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Get accurate quotes from prospective companies
Fast quotes are convenient, but companies need more complete information about you and your car to provide a realistic view of what your premiums will be.

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"Make sure you can rely on the quote given, and (that) the new insurance company will actually deliver the policy for the quoted price," Moore says. "The new provider has to run all of the necessary reports -- credit report, driving record and claims history."

Your driving record, geographic location, age, gender, marital status, vehicle make and model, and insurance history can all affect your premium.

It's not legal for an insurance agent to intentionally quote you an unrealistically low price -- a practice called "low-balling" -- just to get your business. But it is possible that the agent can give you a quote that's lower than the actual amount charged due to inaccurate information received.

The insurance company makes the final decision about your premium rates after it reviews and verifies the information on your application.

Even if your new quote is accurate and you get a great rate, remember that you could face a premium increase if the company institutes a rate hike before your policy renews.

Jones recommends asking your provider when it last made a rate change. Insurance companies have to get approval from their state's insurance department before they do a large-scale rate increase.

"It could be that the new company will go through a rate change soon. They just haven't gotten approval (from their state's department of insurance) yet," Jones says.

Buyers of new policies must be aware of the risk of a rate increase, which could happen at any time.

Look for a quality reputation
Most of us purchase insurance and hope we will never have to file a claim. But accidents happen, so do some homework to make sure the new company will deliver when you need it most.

"As policyholders, we don't cash in auto insurance policies very often, but it's important to have the right company for the times that we do," says Dick Luedke, a spokesman with State Farm Insurance, based in Bloomington, Ill.

"Find out as much as you can (about the new insurer). Talk to your state's department of insurance about complaint ratios, ask other people that you know who filed a claim what their experience was like, and find out what you're purchasing."

Before signing an agreement, make sure the new insurance provider is permitted to do business in your state. A call to your state's department of insurance can verify whether the new company is allowed to sell you a policy. Also, you can check the financial stability of the insurer with a ratings company like A.M. Best. Information can be accessed online and at many local libraries.

"Get all the information you can," Luedke says.

Make sure you have continuous coverage
Before changing insurance companies, check the end date of your current insurance policy on the declarations page. Most insurance policies end at midnight on the day of expiration. Check to make sure your new policy begins at 12:01 a.m. the next day.

"Never terminate one policy before having the replacing policy secured," says Moore. "You have to make sure you have continuous coverage through the transaction."

Some consumers might switch carriers in the middle of their policy term to eliminate the chance of having a lapse in policy when switching carriers. If that is the case, cancel the old policy in writing. Based on the terms of the agreement, the old company will probably mail a refund of the unused premium. However, your old provider may also charge a cancellation fee.

Bankrate.com's corrections policy -- Posted: Nov. 30, 2007
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