Vehicle insurance is one of the necessary evils of modern life. You can pay a substantial amount of money each month to the insurance company, and if you are like some people, you have not had an accident or made any claim in years. Yet when you do suddenly get yourself involved in a collision, the insurance premiums you’ve been forking over all these years will finally pay off.
The advent of the Internet has increased the level of competition between insurance companies. Because you can now sit at home in your bathrobe and compare rates and coverage between companies, they are under more pressure to provide competitive deals. So why not leverage the Internet’s potential to assist you save time, save money, and find the best auto insurance coverage?
To start, let’s be clear about the fact that auto insurance is needed by law in most states―it’s not optional. If you drive a vehicle, you must have auto insurance. So you have to find out what the law requires in your jurisdiction when it comes to how much auto insurance coverage you need to keep. Print out your state’s requirements, and save that information for the next step in the process.
What Could Influence Your Rates
Since insurance prices are all based on statistics, the prices each of us pays varies greatly. Things like the driver’s age, years of driving experience, what neighborhood the vehicle is usually parked in overnight, the make and model of the car, what kind of safety features the vehicle has, and whether or not you have antitheft devices installed―all of these variables will factor into the price you’ll pay for the particular level of coverage you choose.
Before you go too far into shopping for insurance, you might want to request a copy of your driving record. In much the same way that your credit rating shows what kind of interest rate you’ll get when you are applying for financing, your driving record will influence your insurance rate.
When you get your driving record, analyze it to make sure that it is current and accurate. You would not want an error on your driving record to keep you from getting the best rate possible.
What Coverage Do You Require?
Your state sets forth the minimum liability coverage you must keep, as noted above. But these are just the legal minimums and might not give you the coverage you want. You’ll have to decide what you want to buy beyond these minimums. Keep in mind that you are looking to find the balance between having adequate coverage and overpaying.
According to Consumer Reports, a general guideline for adequate bodily injury liability limits is $100,000 per person and $300,000 per accident, plus $100,000 for property damage. These amounts are what your insurer will pay to someone you are in an accident with. For uninsured motorist coverage, you should get the same amount as for bodily injury liability, as this covers your medical costs when someone who is not insured hits you.
Other Types of Coverage
You can also always supplement your policy with specific protections (for a higher premium, of course). For example, many motorists get comprehensive and collision coverage. Comprehensive pays out when your vehicle is damaged or lost due to causes other than an accident, such as vandalism, theft, or weather. Collision coverage will pay to repair your own vehicle if you hit something.
These options typically land with your choice of deductible, usually $250 to $1,000. This is the amount you pay out of pocket before your insurance kicks in; the higher the deductible, the lower the premium you’ll pay for this type of coverage.
Additional options also include rental reimbursement coverage, which pays for a rental vehicle while your car is in the shop being repaired. Roadside assistance coverage will pay to have your vehicle towed. Bear in mind that if you already have an auto club membership, you do not need this additional coverage.
Get the Best Rate
The National Association of Insurance Commissioners (NAIC) advises that you ask your potential insurer about the following discounts:
- Good driving record: Many auto insurers provide discounts to drivers who have not made a claim, haven’t been in an accident, or haven’t gotten a traffic ticket in three years.
- Good grades: Young drivers can get discounts for maintaining a B average or better in school.
- Driver’s education: Some insurance companies give a discount for drivers who complete a driver’s education or driver’s safety course.
- Multiple policies: Some insurance companies offer discounts if you have two or more policies with them.
- Safety equipment: Equipment such as antilock brakes and antitheft devices can give you a discount.
- Longtime policy holder: If you have kept your policy with an insurer for several years, ask about a discounted premium.
- Higher deductibles: A higher deductible usually means lower premiums.
Once you know what kind of coverage your state needs, you will need the following information in front of you in order to get an accurate quote for auto insurance:
- The age and sex of the driver(s), the number of drivers in your household, and their driver’s license numbers.
- A description of your vehicle: the make, model, year, and vehicle identification number (VIN).
- The type of coverage and limits you want.
- Where you park your vehicle overnight.
Once you have gone online and checked for few comparable quotes and you know which company gives the lowest price for the policy you want, you still have to check out the company itself to find out whether it’s reliable.
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You can check with your state’s department of insurance, which should let you to compare premiums for insurance companies in your state. You can also check on the financial stability of a company and look up the number of consumer complaints it has accumulated. Take a look at Weiss Ratings to get an independent rating of the companies you are considering.
Review Your Policy
Before you sign up for a policy , be sure to carefully review your new policy to make sure it includes all the coverage you want. Your policy will have to comply with your state’s legal requirements as well as any additional requirements of the company that finances your auto loan.
Proof of Insurance
Most states that need you to have auto insurance also require that you always have proof of your insurance policy in your car or in your wallet at all times. If you are stopped by the police and you are not able to present proof of auto insurance coverage, you could incur serious fines.
Most insurers will issue a handy insurance ID card―one for each vehicle you have insured. Keep this card in your car’s glove box along with the registration, and you’ll never have to worry about forgetting it. You might even need to give proof of insurance when you register your car; you can use the insurance ID card for this.