Finding the right auto insurance policy may help cut your costs while ensuring that you have the coverage you need. However, you need to take the time to compare options, set coverage limits, and choose a suitable deductible.
Shopping for Car Insurance in Four Steps
Choosing the right car insurance shouldn’t be difficult if you use the following steps to compare policies and their features.
1. Review Your Coverage Options
Insurance companies offer a variety of options with different levels of coverage. Common coverage types include:
- Auto liability coverage
- Uninsured and underinsured motorist coverage
- Comprehensive coverage
- Collision coverage
- Personal injury protection
The most basic insurance plans only protect your liability if you’re found at fault for an accident that damages another vehicle. A liability-only plan costs less but won’t cover your expenses if your vehicle is damaged.
Uninsured motorist coverage offers protection if you’re involved in an accident and the at-fault driver doesn’t have insurance or is underinsured.
Comprehensive coverage is for dealing with damage from vandalism, fire, and severe weather while collision coverage is for collisions, such as hitting another car or a street pole. Personal injury protection isn’t available in every state but covers expenses related to injuries from a car accident.
2. Choose Your Car Insurance Limit
Insurance plans come with varying limits in coverage. The limit is the highest amount of a payout for an insurance claim. You’ll also likely have a separate limit for each type of coverage, such as liability and collision coverage.
Many states have a minimum amount of coverage that you need to select. However, the minimum amount isn’t always enough when you need to cover damage or injuries to another party.
Liability coverage often starts at $1,000 and may max out at $25,000 to $50,000 per person. Collision coverage is typically limited to the value of your car. It’s only meant to cover the cost of repairing or replacing your vehicle.
3. Choose Your Car Insurance Deductible
Along with the coverage type and insurance limit, you need to consider the deductible. The deductible is the amount that you pay out of pocket.
It’s typically deducted from your claim before the insurance company sends you a check. This means that you don’t pay the deductible up front.
The average deductible is about $500. However, common amounts range from $250 to $1000 or more.
4. Compare Car Insurance Quotes
After deciding on the coverage types, limits, and deductibles, you’ll want to start comparing quotes. You can use the information you’ve decided on to get accurate quotes from several different sources.
Make sure that the policy you choose covers all your needs. While the monthly cost is an important factor, the policy should also meet the state’s minimum insurance requirements and address any concerns that you have.
When Should You Shop for Auto Insurance?
You may save money by shopping around for car insurance, even if you already have insurance. Experts typically recommend getting auto insurance quotes at least once per year.
Some companies even offer discounts when you switch insurance. You have nothing to lose, as you can always keep your existing insurance if you don’t find a better offer.
You should also shop around for auto insurance after major changes to your driving situation. For example, it’s a good idea to explore insurance options when adding a family member to your policy, such as a teenage driver or a spouse. You may also want to compare options after purchasing a new vehicle.
What You Need Before Getting a Quote for Car Insurance
You’ll need some basic information before reaching out for a car insurance quote. Insurance companies typically need to know the following info:
- Vehicle information
- Driving history
- Personal information
Insurance companies need to know more about you and your vehicle before providing a quote. You may need to provide the vehicle identification number (VIN) and your vehicle’s make, model, and year. Your vehicle’s mileage is also used when giving you a quote.
Along with vehicle information, insurers want to know more about your driving history. Speeding tickets, DUIs, and other infractions are likely to increase your rates. If you have a bad enough driving record, insurance companies may even find you uninsurable.
You may also need to supply some basic personal information. Getting a quote may require your name, age, location, and driver’s license number. If you have this information available and ready, you should have no problem getting a car insurance quote.
What Types of Discounts Do Auto Insurance Companies Offer?
When comparing car insurance offers, look for available discounts. Try to find special discounts that you may qualify for. Common discounts include:
- Multi-car discounts
- Multi-policy discounts
- Usage-based insurance policies
- Discount for switching insurance
Usage-based insurance includes discounts for safe driving and is only available from select insurance companies. However, many insurers offer a discount when you switch insurance policies, add multiple cars, or buy multiple policies.
Conclusion
Shopping for car insurance requires you to consider your specific needs, starting with your coverage needs. You may want comprehensive, collision, and/or liability coverage. You also need to set limits and choose your deductible. With these details in mind, you can get quotes and compare rates from multiple insurers.
