Shopping for an auto insurance policy is not a very enjoyable process. Many of the shoppers overlook what they are buying and end up overpaying for car insurance. However, no one wants to pay more than they have to. This can be avoided by looking at what you are buying, comparing different policies, and choosing the one that evaluates all your needs. By comparing policies, you can save up to hundreds of dollars every year. Let’s see what you should look for when buying auto insurance for your car.
What type of car do you drive?
Insurers know in great detail what kinds of cars, makes, and models are more or less likely to incur claims. Your insurance price highly depends on the type of car you own. An expensive sports car with a powerful engine has more chances of getting stolen than a midsize sedan; hence, priced accordingly. Classic cars or modified cars often need a special kind of insurance. And you may receive discounts if you have a safe vehicle with the latest safety features and a good safety record.
Where do you live—and park your car?
Insurance rates also depend on which area you live in. If you live in a suburban area, your premium rates will be lower rather than city rates. This is because cars parked in urban areas face a greater risk of theft than suburban areas.
What are your legal obligations?
Carrying minimum liability coverage for your car is every state requirement. You should make sure that your auto insurance policy complies with state mandates. The levels of required coverage are often pretty low. Be aware that you may be sued for a large sum of money if you are involved in a severe accident. To keep yourself safe, you’ll most likely have to purchase a higher level of liability coverage.
How Much Coverage?
First, to purchase the right auto insurance, you will have to find out how much coverage you need. Every state has different requirements; make sure to find out where you live and what kind of coverage is required. You can find a list of each state’s requirements with an explanation of the various types of insurance in “How much Car Insurance do you need?” If you are a first-time driver and need a comprehensive overview of car insurance before you go on, review the guide from the National Association of Insurance Commissioners.
Once you find out what’s required, you can decide what you need. The things you will need will depend on your comfort level in assuming a certain level of risk.
Some things to consider while determining the coverage:
- Getting enough liability coverage if you have a lot of assets, and
- Keeping your driving habits in mind while determining the coverage you need
Check Your Driving Record
You should know how many tickets you earned recently. In case you don’t remember how long that speeding ticket has been on your record, check it with your state’s department of motor vehicles. And if your tickets or points are about to expire, which improves your driving record, then you should wait until that happens before you get quotes. A bad driving record shoots up insurance prices quickly.
Solicit Competitive Quotes
While shopping for auto insurance, set aside an hour or two to do the work. Keep your current insurance policy handy with your driver’s license and your vehicle registration. Some companies don’t give instant quotes; they are not “direct providers” and might put you in touch with a local agent who will calculate a quote.
Gather Company Information
While gathering quotes, prepare notes so you can easily make price and coverage comparisons. Make a list of:
- Annual and monthly rates for the different types of coverage. Make sure to keep the coverage limits the same so you can make apples-to-apples comparisons for cost and coverage.
- The insurance company’s 800 telephone number so you can get answers to questions you couldn’t find online.
- The insurance company’s payment policy. When is the payment due? What kinds of payment plans are available? What happens if you’re late making a payment?
Also read: https://blog.quietquote.com/gap-insurance/
Look for Discounts
Look over for all types of discounts that might apply to your premium. Insurance companies offer different discounts on good driving records, certain occupations or personal affiliations, and your car’s safety or security equipment. Some companies also offer low rates if you join in “pay as you drive” plans. Some give discounts to young drivers who have high-grade point averages. You can also consider the same insurance company for home and auto policies, which will get you a better price.
Assess the Companies
While gathering quotes, it’s also essential to check out what kind of insurance company it is. Here’s a list of some places which will help you to access the company’s track record for customer service, financial stability, and fairness:
- National Association of Insurance Commissioners’ Consumer Information Source access information about insurance companies, including closed insurance complaints, licensing information, and critical financial data.
- Visit your state’s department of insurance to check consumer complaint ratios and necessary rate comparison surveys.
- Consider contacting an independent insurance agent for additional information about a company.
- Check out the financial strength ratings for an insurance company by referring to the ratings from A.M. Best.
- Review consumer satisfaction surveys from J.D. Power and Consumer Reports (subscription required).
- Ask friends and family about their insurers and whether they’re satisfied with them. In particular, ask them how their insurance companies treated them when they had a claim. Did they get an honest, straightforward service? Or was it a hassle to get the matter resolved?
Review the Policy
When you are done selecting your policy, read over the main points of the policy. In addition to verifying that the quote contains the coverage you have requested and priced, it’s also a good idea to find out if the policy states that “new factory,” “like kind and quality,” or “aftermarket parts” can be used for body shop repairs. In this case, you should know at the outset that the insurer will pay for original manufacturer parts rather than fight over the issue later when you have a claim.
Cancel Your Old Policy
When you are done selecting your auto insurance policy, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or your car’s glove compartment.
After you have the auto insurance policy you want, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or your car’s glove compartment.