by Ed Sneineh

Getting some discounts and savings on car insurance involves that you have little information but some common sense, and little knowledge of finance and insurance matters. You perhaps want to spend some times to study the different points of liability insurance, the expressions of deductibles and exclusions, etc. Perhaps you got mislead when someone informed you that your liability insurance will protect  you for towing and rental reimbursement, and possibly it was all miscommunication between you and your broker when your were told that you getting auto insurance discounts because you did not smoke.

When people learn about certain matters they normally save themselves time (which is money), pure money, or  frustration, or maybe all the above. For example, with some companies, insuring 6 autos is less costly that insuring 5 autos! How can that be true? If your policy contains 5 automobiles with full coverage on all, and the policy lists 3 adults and 2 youthful operators, adding up a 6th automobile liability only and appointing the 17 year old boy with 1 ticket to that 6th automobile will unquestionably decrease the premiums with the vast majority of insurance companies that permit assignments of operators  to automobiles. Keep in  mind  that if you cross out the 6th automobile later, you may have to pay additional charges to take that automobile off your policy. The previous case is an example of a complex situation which may intrigue many people, including beginners in the insurance business.

Nevertheless there are other circumstances where you do not have to be an insurance specialist to comprehend how simple it is to save money. The next is a setting that is very common in its occurrence with folks buying insurance, every day. The situation entails people with choices to make either full payment or down payment and scheduled monthly payments.

Situation: Assume that you decided to go ahead with  an insurance quote, with a final cash premium of $635.00.  Payment Options: The insurance agent asks that you either pay in full or may you put a down payment of $175.00, and then the remaining balance of $460.00 be paid with 4 monthly payments of $123.11, leading to total payments of $667.44; [175+(4X123.11)].

Financial services, including insurance, is one of the highest regulated industries. The state regulatory usually sets restrictions on the maximum charges which consumers will pay for having your premiums paid on monthly or quarterly basis. In Illinois the maximum nominal interest rate that can be charged to a consumer for outstanding balances is 10%. However the law permits for setup charges on the contract, with a maximum setup fees of $40.00 per contract.  In the previous examples, the customer is paying $32.44 [$20.00 setup and 12.44 interest] for choosing to schedule monthly payments.

Paying $32.44 may seem an 'acceptable' verdict, but when you take in consideration that this amount is paid to ensure a balance of $460.00 for only four months, which makes it comparable to around 41% of the money borrowed, it will make you wonder if you had the correct judgment. What makes things more knotty is the added fees that customers must pay for (1) Being behind schedule dates, (2) Monthly payment contracts being canceled and reinstated (3) Paying more fees for using online/phone payment system by credit cards or check by fax/phone. If you miss a payment, get canceled and reinstated once, and paid once by check by phone you extra charges will be over $15.00. So imagine if you miss that two times, or even three times!!

Making a lump sum payment on your insurance if you can, and you must  make an attempt to, pay for it, will certainly save you money,  time and stress from seeing late or cancellation notices on your insurance!
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