Shopping for Car Insurance
Insurance terms are sometimes confusing. Here’s a list of what to look for when shopping for car insurance:
Types of coverage: Automobile insurance typically consists of several types of coverage, including liability, collision, comprehensive, uninsured/underinsured motorist, and personal injury protection (PIP). It’s important to understand what each type of coverage entails and what it covers.
Limits and deductibles: Insurance policies have limits on the amount they will pay for each type of coverage, and also have deductibles that the policyholder must pay before the insurance company pays out. Understanding these limits and deductibles is important when selecting a policy that suits your needs.
Premiums: The premium is the amount the policyholder pays for the policy. The premium can vary depending on several factors, including the type of coverage, the limits and deductibles, and the policyholder’s driving history.
Discounts: Insurance companies often offer discounts to policyholders for various reasons, such as being a safe driver, having multiple policies with the same company, or having a certain type of car. Understanding what discounts are available can help you save money on your policy.
Claims process: It’s important to understand how to file a claim if you’re in an accident or if your car is damaged or stolen. Knowing the steps involved in the claims process and how long it takes to receive a payout can help you make an informed decision when selecting an insurance company.
Exclusions: Insurance policies may contain exclusions that limit coverage for certain situations, such as racing or using the car for commercial purposes. Understanding these exclusions is important to avoid unexpected costs.
Customer service: Good customer service is important when selecting an insurance company. Look for a company that is responsive to your needs and has a good reputation for handling claims efficiently.
Overall, it’s important to research and compare different insurance companies and policies to find one that fits your needs and budget. Understanding the key items listed above can help you make an informed decision and ensure that you have the right coverage for your car.
Shopping on the Internet
The internet is a great place for shopping for car insurance and learning the basics…and since you’re here, you have already begun. There are several sites that will give full quotes online, and lot’s of others that will take your information and get back to you. Once you have a general idea of what your costs will be, check with a local agent. Sometimes it’s convenient having someone local to talk with rather than spending time on an 800 number, but keep in mind that many of today’s insurance agents are just order takers and can’t offer service.
Shop around because prices vary for many reasons. Companies base their rates on a variety of factors and may have different priorities. Your rate may be based on:
- Your driving record, a better record will lower your premium.
- The number of miles you drive each year, the more miles you drive, the more chance for accidents.
- Where you live, companies track neighborhoods by the number of accidents, car thefts and lawsuits, along with the cost of medical care and car repair.
- What kind of car you drive, some cars cost more to insure than others because they are stolen more often, cost more to replace, more to repair, and the overall safety record of the car.
- Your age, generally, mature drivers have fewer accidents than newer drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car (and boys are charged more than girls).
- Your credit record.
- The amount of coverage, the more coverage you have, the more it costs.
One hazard of shopping online is the number of sites that have you fill out long forms only to tell you that someone will call. There are two dangers here. The first is outright identity theft. Don’t give your personal information to any company that you don’t recognize. Make sure that the URL, that’s the http address at the top of your browser, matches the company name.
Many of these online sites aren’t actual insurance companies. They gather your name and information, then send it to a bunch of real insurance companies to collect referral fees. Some of them may provide a service like comparing rates.
The second danger isn’t as serious but it still might cost you. Many companies have trainees or special telephone reps return your calls. Ask a few questions. If they’re not knowledgeable, or don’t want to deviate from their set sales script, it’s probably not a good deal for you. You’ll be giving them a lot of money over the years. They owe you a representative with full knowledge of discounts and situations.