Determining the Lowest Premium

Many times people who call me for car insurance quotes are satisfied just by hearing the “cost per month.” It seems simple: Determine the lowest total cost, and you know what you are getting into. But in fact, hidden costs can lurk beneath the surface. Here are some questions to ask your insurance broker:

  • What is the annual premium if the policy is paid in full? (Suddenly, it might not sound like such a good price.)
  • What are the payment options? (Perhaps if you pay up front, you can save money in the long run.)
  • What is the charge per payment for each option?
  • How much of a down payment is required?
  • Is the policy financed through the insurance company or through a third party?
  • What fees are associated with purchasing this policy?

Asking these questions will help you understand where hidden fees may lie. Always request an official copy of the quote, laying out the payment options, fees, and down payment. Don’t settle for only a phone call or the text of an email. Make sure you have everything in writing before you agree to what seems to be a great monthly insurance premium.

Once you ask the questions above, you will be able to determine whether the monthly cost is an accurate reflection of what you will pay, or if you will be paying more than you anticipate.

Brian H. Merriam, CPCU, ARM, AAI
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