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Understanding Car Insurance Fees

Understanding car insurance fees and where they come from is a first step toward figuring out what you can do to avoid them and minimize your spending on insurance as a whole. There are some fees you can't do anything about. But there are many others you have some control over. The specific bundles of insurance protection you choose to include in your plan each come with their own associated fees. You will pay a surcharge for the presence of accidents and other citations on your driving record, another source of fees that can drive up the cost of your policy. And broker and coverage fees add nothing to the value of your policy while increasing its cost. Understanding the source of these fees and the ways you can work to avoid them can help you keep down the cost of your auto policy.

Coverage Choices Affect Premium Fees

It may seem altogether obvious to note that your choices in which modes of insurance to choose and which ones to leave out will affect what you spend on your policy. But it remains worthwhile to point this out, if only to remind you that you do have a great deal of control over the price you pay for insurance. If you are hard up for money and desperate for savings, you more than likely will have to opt for a policy only including the legal minimum liability protection. Of course, if you owe money on your vehicle, you will likely have to add collision and comprehensive to the list.

No matter what types of coverage you go with, each one adds a certain cost or fee to the overall insurance tab. If you find that a certain part of the policy is one you cannot live without, there are some things you can do to try to keep your cost down. For example, you really owe it to yourself to shop around for insurance and see what kind of deal you might be able to get. Maybe a non standard insurer or some kind of specialty provider can get you a cheaper price. Check into all your options to hold down your fees.

Aside from price shopping among different providers, you could also choose to lower the limits of protection for each portion of your policy; or alternately, you could increase your deductibles to make your premium more affordable. The choices you make, from the specific options you choose to include to their specific characteristics and even the company you pick, will have a great effect on your fees. By dropping extra coverage like roadside assistance, you could save even more.

Effects of Accidents and Citations

Naturally, at-fault accidents and moving violations also have a direct bearing on the price you pay. Your premium is largely based on your insurance score, which takes into account your driving record. Accidents and citations will cost you money in the way of fees for carrying you as a non preferred or even non standard or high risk driver, depending on the number and severity of the offenses.

In a general sense, auto insurance is a contract between you and an auto insurance company, stating that in exchange for a premium payment, that company is choosing to take on the risk of adding you to their roster of customers. The basis of their risk is the tendency you show as a driver to exhibit behaviors that would cost them money. If they have to insure a driver who exhibits a strong tendency toward claims and tickets, an insurance company is sure to charge a fee in exchange for assumption of the risk they are taking on by protecting you as their client.

Both accidents and moving violations stay on your record for a certain period of time. The specific length of time may depend on the particular insurance company you are working with and the severity of the offense. You can count on additional fees coming on your renewal if you get into a big accident or receive a major citation, if such an adjustment does not occur sooner than that. Sometimes insurance companies respond right away to try to begin to recover their losses in these instances, and sometimes they wait, making changes in six month cycles or at the policy renewal.

Either way, it is clear that accidents and moving violations add significant fees to your auto insurance policy. You cannot go back in time and change the way you drove in the past, but you can change the way you drive in the future. Do everything you can to avoid these sorts of situations in the future. Drive responsibly, courteously, and within the law. You cannot eliminate risk from your own driving, but you can greatly reduce it by adjusting the way you drive and the behaviors you exhibit while you are behind the wheel. And if you do everything in your power to reduce your own risk, you are also reducing the insurance provider's risk as well. Over time, they will recognize this, and adjust your rates accordingly, saving you from those oppressive fees.

Broker Fees and Coverage Fees

But then there's a whole different type of fee that has nothing to do with you either as a driver or as a customer making choices in your policy. Broker and coverage fees are two of the fees doing nothing to add value to your plan while adding significantly to its price. A broker fee is a one-time, lump sum fee attached to the front end of a policy as a commission for the agent who sold it to you. Also called a policy fee, a broker fee can be easily avoided by simply avoiding an agent and getting a policy yourself by going online.

Coverage fees, on the other hand, are pretty well unavoidable and non-negotiable. They cover costs like the underwriting of a policy. But if you are aware of these fees and are working on your own behalf to negotiate your premium, you might be able to get a discount added to your plan to offset this fee to some extent. The more you know about any fees and the ways your policy is put together in general, the more power you will have to influence your insurer and possibly get them to budge at least somewhat on their prices. It is well worth the time and effort to look into these fees and learn all about them.

When you solicit quotes for your next insurance policy, take a look at all the fees each auto insurance provider is proposing to charge you. Do what you can to learn about each of these fees: what they really are, what they cover, and what you might be able to do to avoid or reduce them. You might not be successful every time; but chances are that if you keep at it, you will stumble upon certain fees that can be waived or costs which can be negotiated downward. Auto insurance companies do have ultimate say in the prices they propose to charge you for their services, but you do have more say than you think.

 

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