How to Shop for Car Insurance and What Kind to Get
Buying car insurance can be easy on one hand, sometimes difficult on the other. All the choices you have and the decisions you need to make tend to make it all seem a little confusing. But once you get to know the process you should find clarity.
Things we’ll look at today include:
- Types of coverage
- Coverage limits
- Driving history
- Insurance discounts
- Getting quotes
The first step is to gather together information that you will need in your hunt for the auto insurance that is just right for you.
Look at Your Current Policy
If you already insure a car, review what is in the auto insurance policy. Note how much coverage you have, what type it is and how much you are paying for it.
Find Out What Your State Requires
States vary as to car insurance limits and regulations, so find out your state’s rules. You can find out about each state’s Insurance Guidelines using our interactive map.
Consider Your Driving Record
If you have been ticketed for speeding or other driving violation insurance companies may see you as a risk. You can also get dinged for having a particularly rough commute if it puts you in intersections and busy roads known for fairly frequent car accidents. These kinds of influences can result in higher insurance premiums.
Learn About Auto Insurance Providers
Go online and look for reviews of auto insurance providers, ask family and friends for recommendations to determine which companies have good reputations in terms of reliability, costs and customer service.
- You can also use the Consumer Information Source of the National Association of Insurance Commissioners (NAIC). The site provides insurance company including licensing, key financial information and closed insurance.
- Explore your state’s department of insurance to learn about consumer complaints and rate comparison surveys.
- See customer satisfaction surveys from D. Power.
- Go to M. Best to review financial strength to learn about an insurance company’s ratings.
How Much Can You Afford to Pay?
Do you know how you will pay deductibles if you are in an accident? Do you have an emergency fund that can help you do so? Assess your finances and cash flow to give you an idea of how much you can afford to pay.
When you file a car insurance claim, you pay a deductible out of pocket and your insurance company pays the rest. Deductibles are most commonly at $500 or $1000. If you have a $500 deductible, for instance, and a car accident leaves you with $2500 in repairs, you will pay $500 while the insurance provider covers the remaining $2000.
Whenever You File a Claim
Whenever a policyholder has to file a claim it can lead to higher premium rates. You could very well end up paying more over time. There might be times when you decide to pay out-of-pocket instead of through the deductible. If your car needs repairs that add up to $400, you would be better off to not file a claim at all and simply pay for the repairs out-of-pocket.
Types of Coverage with Deductibles
Deductibles generally apply to specific types of coverage and can be for different amounts when you have more than one type of coverage:
- Collision coverage
- Comprehensive coverage
- Uninsured property damage coverage
Collision insurance covers accidents that entail hitting another car or some other object such as a building or fence. Your insurance company pays your resulting costs minus whatever deductible you pay.
Comprehensive coverage pays for things not covered by collision insurance like theft, vandalism, weather events and damage related to an animal, such as an accident caused by a deer darting onto the road. As with collision insurance, comprehensive covers you whether or not the accident was your fault or the fault of someone else. Deductibles apply.
Uninsured or Underinsured Property Damage Coverage
This type of insurance comes into play when you are in a car accident that was not your fault, but the other driver is without auto insurance or the insurance limits are lower than what was needed to fully repair your car.
What About Liability Insurance?
Liability insurance does not include deductibles. Generally, limits for bodily injury for one person injured in an accident are $50,000; a limit of $100,000 to cover all people injured in an accident; and property damage liability is $25,000.
As the at-fault driver in an accident, if you have opted for $50,000 in bodily injury liability coverage but have $100,000 in assets, the other person could sue to recover enough from your assets to make up the difference between the $50,000 in coverage and how much your medical costs actually turn out to be.
How to Shop for Car Insurance
When you want to get auto insurance you have options. You can buy online, over the phone, through an independent agent or broker, or a “captured” agent who works exclusively with a particular insurance company.
Ask for quotes from a few different insurance companies.
Some websites specialize in helping users get quotes from a range of companies. Considered one of the most convenient and fastest way to get quotes, online insurance sites, such as with EINSURANCE will show you companies’ options for you based on information you provide. You don’t have to deal with possible pressure from an agent or company representative.
In Person or by Phone – Captive Agent
For getting quotes through an in-person agent for a single, typically larger insurance company, the agent can suggest multiple insurance policies offered by the company. Working on commission, captive agents earn a percentage of your premium. They can be a good choice if you want to work with the agent over the long-term.
In Person or by Phone – Independent Broker or Agent
The biggest difference between a captive agent and an independent agent or broker is that independent agents and brokers don’t represent just one company. Instead, they work with a variety of insurance providers, from small to large. They work on commission, a percentage of the buyer’s premium. Brokers, but not agents, are required to disclose their commission rates and any fees they charge.
There are many other fine points you’ll come to understand in your search for the best auto insurance policy for you. Get started by learning more about auto insurance on the EINSURANCE website.