Wednesday, May 9, 2012

Easy and Sure Saving: Ridding Finance Charges, Interest on Auto Insurance Premiums Saves a Lot

Congratulations on all the discounts and free stuff that your agent provided you to get you to buy your auto insurance policy with his/her company. Certain savings and discounts on auto insurance may require you to have little information, common sense, and little knowledge of finance and insurance matters. Perhaps you feel that you want to spend some times to study the different aspects of auto liability insurance, the meanings of deductibles and exclusions, etc. to get more discounts and savings. On the other hand, you might have been mislead when someone informed you that your liability insurance will give you coverage for towing and rental reimbursement, and possibly it was all miscommunication between you and your insurance company representative when your were informed that you getting auto insurance discounts because you are a smoker or not on high blood pressure medications.
When people are trained about certain matters they normally save themselves time, pure money, frustration, or maybe a combination of all the above. For example, with a number of insurance companies, insuring four cars is less costly that insuring three cars! How can that be accurate? If your policy contains three cars with comprehensive and collision on all of the vehicles, and the policy lists two adult and one youthful drivers, adding up a fourth auto with liability coverage only and setting the 17 year old young man who has a couple of tickets to that fourth vehicle will indisputably drop off the premiums with the majority of insurance companies that authorize assignments of certain drivers to certain cars. Take into account that if you cross out the fourth car later, you may have to pay more money to take that car off your auto policy. The preceding situation is an pattern of a multifaceted situation which may intrigue many people, including those who start a career in the insurance industry.

On the other hand there are few other circumstances when you do not have to be an insurance whiz to figure out how straightforward it is to save money when you purchase your policy. The next is a setting that is very universal in its occasion with persons buying insurance, all the times. The scenario entails folks with choices to make either full premium payment or a down payment and then scheduled certain number of monthly payments.
The Scenario: Suppose that you decided to purchase an auto insurance proposal, with a total premium of $592.00. Payment Options: The insurance representative asks that you either pay the $592.00 in full or you may put a down payment of $165.00, and then the remaining balance of $427.00 be paid with 4 monthly payments of $114.64, leading to total payments of $623.56; [165+(4X114.64)].
The financial services industry, including banks and insurance companies, is one of the highest regulated industries. The state regulatory body frequently sets restrictions on the maximum charges which consumers will pay for having your premiums paid periodically (ie monthly). In Illinois the maximum nominal interest rate that can be charged to a consumer for outstanding balances is 10%. However the law allows for setup charges on the contract, with a maximum setup charge of $40.00 per contract. In the previous examples, the customer is paying $31.56 [$20.00 setup and 11.56 interest] for choosing to schedule monthly payments.
Paying $31.56 may look like an 'tolerable' decision, but when you take in thought that this total is paid to ensure a balance of $427.00 for only four months, which makes it s APR equal to around 43% of the money lent to you, it will make you wonder if you took the correct ruling. What makes the whole issue more tricky is the added fees that people are required to pay for (1) late payment charges, (2) contract reinstatement charges (3) Extra fees for future use of charge cards or check by phone. If a payment is missed, or if your contract got canceled/ reinstated, or wanted to make payment by check over the phone, then your extra charges will be over $15.00. So imagine if you miss that more than once time.
Making a full payment on your insurance if you can, and you must make an attempt to, pay for it, will definitely save you money, time and hassle from seeing late or cancellation notices on your insurance!