Auto insurance brokers can be very helpful in your quest for the ideal insurance policy, however most experts suggest you don’t buy insurance thorough one, why?
The good
Auto insurance brokers can take all the hassle out of shopping for insurance and make the whole process relatively stress free for you. You don’t need to do the running about and locate quotes and bargain for discounts etc.
This can be especially helpful if you run a business and are looking for business auto insurance, are insuring a family or a group of friends or colleagues under a group policy. In such group policies there is a bit of paperwork to be taken care of with regards to each person’s requirements, cover, extent of cover, and payment plan. An insurance agent can ease things for you and get all the ground work done at no cost to you. Insurance agents get their commissions from insurance companies, which is not necessarily a good thing.
The Bad
Auto insurance brokers and agents work on a commission and are not really compelled to get you the best deal. It’s not uncommon for an insurance broker to oversell you insurance, sell you inadequate cover with a very high extent, and at times suggest you take your policy from a company which might not give you the best cover nor the best price. A bigger policy will fetch the insurance broker a bigger commission, just as one insurance company will pay him a higher commission as compared to what another one would. .
The verdict
It’s relatively safe to go with an insurance broker if you watch over what he is doing. Decide on what cover you would need and also the extent of cover you would require and then contact the broker and state your specific requirements. Request three to four quotes and go through them and compare them, ask the broker to assist you in understanding any clause you may not be able to understand on your own.
The options
Liability: your insurance company will pay for the medical bills and repair bills of the other person involved in the accident if it was your fault.
Collision: your insurance company will pay for your medical bills ad repair bills if the accident was your fault.
Non collision: your insurance company will pay for any non collision related damage to your car such as theft, vandalism etc
Comprehensive: your insurance company covers your vehicle from accidents, theft, vandalism, fire, hail damage, damage caused by acts of nature
Thus you can see that comprehensive is the best cover you can get and incorporates the other plans into it. You can set a deductible amount which is basically the amount you are willing to shell out of your pocket in the event of an accident. Higher deductibles mean lower premiums but higher risk at the time of an accident.
Uninsured cover: If the accident was the other driver’s fault you are expected to get your claims settled from his or her insurance company. If the other driver doesn’t have insurance or has insufficient insurance you need to get your claim settled from him or her and they will need to pay the amount out of their pocket. You can alternatively go for underinsured or uninsured insurance which will cover you from such situations and cover your bills as necessary.
