Q: What kinds of questions should I be expected to answer when I am applying for an insurance policy? Why do insurers need so much information?

A: When you apply for an insurance policy, you will be asked a number of questions. For example, the agent might ask you your name, age, gender, address, etc. In addition, you will be asked a number of other questions which will be used to determine how likely you are to make a claim.When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, it will want to know about the person's previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured. Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than will a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you. In addition to your age, gender and driving experience, information about the vehicle you drive and how you drive it is also needed to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact; and, someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on the weekends.

Q: What are the advantages to using an agent to purchase insurance?

A: By using an agent to purchase insurance, the policyholder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local, independent agent is able to deliver quality insurance with competitive pricing and local personalized service.

Q: What should I consider when purchasing automobile insurance?

A: There are a number of factors you should consider when purchasing any product or service, and insurance is no different. Here is a checklist of things you should consider when purchasing automobile insurance.

1. Don't base your decision on price alone. Base your decision on value - what you get for what you pay. Consider the quality of the company's claims service and consumer education.
   
2. Purchase the amount of liability coverage which makes sense for you.
   
3. You should decide which optional coverages you want. For example, do you want optional physical damage coverages or is the market value of your car too low to warrant purchasing them.
   
4. Once you have decided what you want in your automobile insurance policy, you can now decide from whom you would like to purchase the insurance. For example, you may decide you like the idea of purchasing insurance from a mutual company rather than a stock company.

Q: What are some practical things I can do to lower my automobile insurance rates?

A: There are a number of things you can do to lower the cost of your automobile insurance. The easiest thing to do is shop around. It is not surprising to find quotes on automobile insurance that can vary by hundreds of dollars for the same coverage on the same car. When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, but this is not always the case. Another way to lower the cost of your automobile insurance is to look for any discounts that you may qualify for. For example, many insurers will offer you a discount if you insure multiple cars under the same policy, or if you have had a driver education class in the last five years. Be sure to ask your agent or your company about their discount plans. Another easy way to lower the cost of your autmobile insurance is to increase the deductible. Simply raising your deductible from $250 to $500 can lower your premium sometimes by as much as five or ten percent. However, you should be careful to make sure that you have the financial resources necessary to handle the larger deductible.