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Michael Jacksons : What Is GAP Coverage? How can I obtain this insurance?

GAP contracts pay the difference between what a primary insurer pays in the event of a total vehicle loss, including theft, and the outstanding loan balance on the vehicle. (Approximately 2.5 million vehicles are totaled annually.) It is a form of credit insurance similar to credit life, credit disability, and credit property insurance. To illustrate, GAP operates in the following manner.

 Loan balance $28,500

Actual cash value paid by primary insurer $24,500

Difference ($28,500–$24,500) $ 4,000

Deductible $ 500

Total out of pocket expense of owner $ 4,500

GAP pays $4,000 + $500 $ 4,500

 New, used, and leased vehicles and motorcycles are eligible for GAP. GAP pays for losses up to a certain amount ($100,000 for example) and, unlike the example above, it may not include the deductible. Further, the term of coverage may be coextensive with the term of a loan or it may be of shorter duration.

You can obtain Gap insurance through your dealer or directly with the insurance company. Compare auto insurance quotes on line for Gap insurance and you will find good deals with low insurance quotes. Check it out for yourself.

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Libra : If  I am shopping for an auto insurance quote that will NOT effect my credit (score) in any way, right?

Compare auto insurance and credit insurance.

Response :When you compare auto insurance quote or review car insurance remember that credit rating is important for auto insurance. You can opt and get all the auto insurance discounts but still not get a low auto insurance rate. Remember that it is a wrong myth that if you compare auto insurance quotes your credit score is affected.

Libra, you are right with the fact that insurance companies do look at the credit score before they underwrite and rate an auto insurance policy.  Some insurance companies refuse you insurance if your credit score is not good. On the other hand if your credit is good than your car insurance premium can also reduce by 50%.

Now coming to the point of whether your credit score is affected in any way than let me reassure you that this is not the case. If you are applying for a line of credit or a credit card or a loan and a credit enquiry is done for the same, your credit score will certainly be affected which is a hard hit. The hit which is made by the insurance company is considered a soft hit, which will not affect your credit rating.

The bottom line is this; your credit scores can affect your insurance rates. It is true in most states that the better your credit score, the lower your auto insurance premiums will be. You can compare for free, quickly and conveniently without any obligations the multiple quotes offered online and narrow down your search to the cheapest quote. Once you have the two cheapest quotes you can make enquires about the coverage and the insurance company before you decide with whom to insure.

Thanks.

Kamlesh

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Reader: What does my credit rating have to do with my auto insurance quote or rating?

Low auto insurance rates can be obtained with good credit.

Auto insurance quote credit rating

Response : One thing you need to remember when you review car insurance or compare auto insurance quote to get low auto insurance rate is that your credit score should be good. Normally one would think that there should be no relation between the car insurance rate and a credit score.

The credit score is generated from a person credit history. Credit history is the score of the time-line and the default in paying your bills like the telephone bills, loans or any outstanding bills. The insurance premium for any risk including the auto insurance is based on the probability of loss; the higher the probability of loss, the higher the risk and the higher the rating.

The actuarial department of the insurance company has analyzed the “insurance score” and based the auto insurance premium on this.  The “insurance score” is generated from a numerical rating of the person credit history. Based on the “insurance score” the underwriting of the auto insurance is done.  The insurance companies have found that if the credit score of a person is low than the risk is higher. Statistically it has been found that a person with a low score for credit history is more likely to place a claim or meet with an accident than one with a higher score. This may be the case since a person with poor credit has financial problems and is under stress.

So the next time you reveiw car insurance coverage or compare auto insurance quote, whether online or through an agent, please check your credit score. If it is good – you have a ticket to low auto insurance rates. The agent is not giving you low auto insurance rates – you are entitled to low auto insurance rates.

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