Many people have a perception that the cheapest insurance coverage is the best coverage or policy that they deserve. However, with all the frauds going around on the Internet, cheapest insurance may not be the idea we once believed. In most cases, this is true. Auto insurance is such a big industry and there is a lot of money going on around it. Given this fact, it has become a favorite target for scammers especially those unsuspecting policyholders who do not take time to review the rates, or even check the company they are dealing with simply because they are out of time or do not want any hassles during purchasing.
We cannot stress this any farther, you have to carefully check the company that you are planning to make business with, in order to determine their reliability in terms of honoring insurance claims and their legitimacy as a whole. However, these are not only the factors that you must be concerned about.
For instance, re-insurance rates would have to be considered because this could easily double or triple your policy cost next time around.
Now, we do not want to see you in an accident anytime soon, but not considering this factor alone is a big mistake as well as failing to get a low-cost insurance as a long-term goal and only after you had an accident.
One of the many secrets that insurance companies keep from their policyholders is that different insurance companies also have different reinsurance rates. Some insurers will even make it hard for you to gather this information. And since you already know this, the best way is to ask for it deliberately. Reinsurance rates are also known as surcharge schedule, and the law mandates insurers to make this information available to all policyholders, this list will show all the possible increases in premium costs after an accident. As we mentioned earlier, the rates will vary from a couple hundred to several thousand dollars depending on the insurer, which means that your low-cost insurance coverage today, may become a very expensive policy tomorrow even with just one accident.
If you did not encounter problems in obtaining the surcharge schedule, you might be having problems of understanding what it meant. In this report, you are not going to see an explanation as simple as “if you have this accident, your insurance rates will increase by a hundred dollars.” Instead, what you will see in this report are percentages based on the initial rates. The problem is that sometimes it is hard to determine your initial rates probably because of some discounts deducted into it. Keep in mind that surcharge schedule is based on your initial rates before any deductions or discounts are applied.
In theory, if you are interested in purchasing a low-cost insurance coverage, do not forget to ask your insurer how much your policy will increase after an accident. A good company should be able to tell you at least an approximate of the probable cost. However, if they hesitate to give this information, you can ask for the surcharge schedule and your initial rates prior to any deductions. After which, you can easily determine the probable cause of your insurance policy if you encounter an accident in the future. Though prepare yourself to spend a little time crunching through the numbers.
