Your goal is the same: you want to be properly protected if you get into an accident, but you don’t want to spend more than you have to, whether you are insuring the first vehicle you’ve ever purchased or you haven’t paid attention to your insurance policy in a while. Sadly, many individuals overpay only because they don’t want to waste time looking for auto insurance. In spite of how it looks in advertisements, it isn’t inherently fun.
But you could save hundreds of dollars a year by doing some comparison shopping. When one of our editors used a rate-comparison program, he offered simple coverage quotes ranging from $1,006 to $1,807 for his two old vehicles, a difference of $801 a year. If you pay thousands to your current insurance provider because you have a couple of tickets or an expired adverse credit record, it might be well worth the effort to buy your policy against others.
Step 1: How Much Coverage?
Start by finding out how much coverage you need in order to find the right car insurance. Requirements vary from state to state, so take a moment to find out where you live, what coverage is required. In “How Much Car Insurance Do You Need?” you can find a list of the requirements of each state and an explanation of the different forms of insurance. If you are a first-time driver and need a clear description of car insurance before you go on, review this guide from the National Association of Insurance Commissioners. You are now ready to build a list of the various forms of coverage you are considering.
You can determine what you need once you know what’s needed. In assuming a certain level of risk, your decision will depend on your own degree of comfort.
Experts suggest that you can have adequate liability coverage to shield them if you have a lot of money. Let’s assume you have $50,000 in insurance coverage for bodily injury, but $100,000 in personal assets. If you’re at fault in an accident, the other party’s lawyers could go after you for the $50,000 in medical costs that your insurance doesn’t cover.
The general liability cap recommendations are $50,000 liability for bodily harm for one person involved in an accident, $100,000 for all persons injured in an accident and $25,000 liability for property damage (usually represented as 50/100/25 in insurance shorthand). Let your financial condition be your guide here once again. Don’t purchase coverage excessively if you have no assets that an attorney may pursue.
In deciding the coverage you need, your driving habits may also be a factor. You can get more full coverage if your history is packed with crumpled fenders, if you regularly speed up, or if you make a long journey every day on a treacherous winding road. Collision compensation provides for damage to your vehicle in an accident or damage caused by an inanimate object hitting (a tree, lamppost or fence, for example). Comprehensive coverage addresses harm that, such as from arson, burglary or flood, did not occur in a collision. It also protects windshields that are broken.
Bear in mind that collision and extensive coverage may not have to be bought. Let’s say you’ve got an older vehicle, you’ve got a decent driving record, and there’s little chance of your car running into an accident. But you have to park for work in such a neighborhood, so the car is at risk of being stolen. You could then purchase full coverage and miss the crash insurance.
Step 2: Review Your Insurance
To get the details you need, read through your existing policy or call your car insurance provider. Jot down the amount of coverage that you currently have and how much you pay for it. Take note of the insurance’s annual and monthly rates as you can get both forms of having quotes. You’ve got a figure to beat now.
Step 3: Check Your Driving Record
You need to know how many tickets you’ve recently had. Check with your state’s motor vehicle department if you can’t recall how long the speeding ticket has been on your record. If a ticket or points you won are about to vanish, thus strengthening your driving record, wait until you get quotes before that happens. Like a poor driving record, nothing pushes up the price of insurance.
Step 4: Solicit Competitive Quotes
Now it is time for shopping to start. For this assignment, set aside at least an hour. Have your new insurance policy, driver’s license number and car registration at your fingertips. With online services, you can start. If you go to an online platform to get an insurance premium comparison, you can type in your details and start creating a comparative quote list of companies. Bear in mind, however, that these one-stop shopping sites do not include all insurance providers. If a suggestion from friends and family or other research points to a business that you think might be a winner, you can go to its website directly or call its toll-free number to get a quote.
It takes about 15 minutes to complete each quote form. For example, if the entire shopping process takes you two hours and you save $800, you can essentially receive $400 an hour. It could be well worth your time.
You may not get instant quotes when you use these pages. You may be approached later by certain businesses. Some that are not “direct providers” may put you in contact with a local agent who will then measure for you a quote.
Step 5: Gather Company Information
Take careful notes when you’re researching firms, so you can easily make price and coverage comparisons. Maintain a list of:
- For the various forms of coverage, annual and monthly rates. Make sure that the coverage limits are the same so that cost and coverage comparisons of apples-to-apples can be made.
- 800 telephone number from the insurance provider so that you can get answers to questions that you couldn’t find online.
- The reimbursement schedule of the insurance company. When should the payment be due? What are the available forms of payment plans? What happens if you make payments late?
Step 6: Work the Phones
Make some calls once you have obtained details online. Contact those businesses that you have not been able to get an online quote from. It can actually be simpler and quicker to do the research by phone than on the internet, if you have your driver’s license and vehicle registration near at hand. Be sure to check the price when you get a quote over the phone by telling the representative to email you the quote.
Step 7: Look for Discounts
Make sure you explore all your choices relevant to discounts while you are shopping around. For such items as a good driving record, the safety or safety equipment of your vehicle, and certain professions or professional affiliations, insurance firms include them. Some businesses also offer lower rates if you sign up for plans to “pay as you drive”. Some can have major discounts for young drivers who have high grade point averages in the family. Also, try using the same home and car insurance provider, which will typically give you a better deal.
Step 8: Assess the Companies
You now have much of the details about the price and coverage you need to make a decision. You will see which company’s insurance coverage is cheapest, but it is necessary to bear in mind that cost is not the only basis for choosing an insurer. How do you understand which business is financially sound? How do you figure out whether you are going to be handled appropriately by an insurance provider, particularly in the event of a claim?
Here are some places to search to build a better understanding of the track record for fairness, financial stability and customer support of an insurance firm.
- Use the Customer Information Source of the National Association of Insurance Commissioners to access insurance company information, including closed insurance claims, licensing information and key financial data. To check customer complaint ratios and fundamental premium comparison surveys, you can also visit the insurance department of your state.
- For more details about a company, consider contacting an independent insurance provider.
- For an insurance firm, review the financial strength ratings by referring to the ratings from A.M. The best.
- Examine J.D.’s customer satisfaction surveys Reports on Electricity and Customers (subscription required).
- Ask friends and family about the insurers and whether they are pleased with them. In specific, ask them how they were handled by their insurance providers when they had a claim. Did fair, straightforward service come to them? Or was it a hassle to settle the matter?
Step 9: Review the Policy
Read through the key points of the policy when you’ve done your research and zeroed in on a company. In addition to checking that it includes the coverage you have requested and priced, it is a good idea to find out whether the policy specifies that, according to the Insurance Customer Advocacy Network, “new factory,” “like kind and quality” or “aftermarket parts” can be used for body shop repairs. Think hard about whether this is the business for you if the policy has such a provision, particularly if you own a relatively new car that you expect to keep for a while. In this situation, it is better to realize at the start that when you have a claim, the insurer will pay for original manufacturer parts rather than seek to fight over the problem later.
Step 10: Cancel Your Old Policy
Cancel coverage for your current insurance provider until you have the car insurance policy you want. Make sure you place the card in your pocket or the glove compartment of your car if your state needs you to bring evidence of insurance.