What You Need to Know When Shopping for Auto Insurance

Most people don’t get very excited when they think about shopping for auto insurance. No one loves surfing the internet for the best rates or asking friends and family for an auto insurance recommendation.

We all know we need the sense of security that auto insurance provides in the event of an accident; but shopping for auto insurance that fits all of our needs can take up a large chunk of time and energy. After all, we already work hard enough, right?

Unfortunately, most people don’t know that shopping for car insurance doesn’t have to be so difficult. With a little research and education on the subject you can actually find exceptional insurance coverage at a great rate-and even have money to spare. Remember, knowledge is power!

So, what should you be aware of before searching online or picking up the phone to request car insurance quotes?

Here are a few steps to follow:

1. Ratings determine your auto insurance premiums. Insurance companies rate you by the amount of risk you present and then they categorize you with others who have similar risk rates. Such factors for risk are age, gender, location, driving record, marital status, prior insurance coverage, yearly mileage, and your vehicle’s make and model.
2. Car insurance rates can be lowered with discounts. These are rewarded to anyone considered low-risk by the auto insurance companies. These discounts are available for having multiple vehicles insured, taking a driver’s education course, having a student with good grades, installing anti-theft devices, being a responsible driver, driving low miles and purchasing more than one policy type with your insurance company.
3. Each state individually sets auto insurance requirements. The type and amount of car insurance coverage required by law varies depending on whether your state is a tort or a no-fault state. You should check with your state insurance department to figure out which system your state follows and to know what the legal minimum for auto insurance is.
4. Optional coverage is a good idea. It is a good idea to purchase collision and comprehensive insurance coverage for your car, unless you drive an older model vehicle. Collision insurance covers damage to your car if it collides with another car, or a stationary object. Also, comprehensive coverage pays for auto damage resulting from fire, weather, vandalism, floods and theft.

If you drive an older model car, the claims you file for an accident may actually cost your auto insurance company more than your car is worth-which makes purchasing collision and comprehensive pointless.

5. Protect yourself. Until you contact your state’s department of insurance, don’t even sign an application for car insurance. It is your responsibility to make sure any auto insurance companies you’re considering are licensed in your state! It’s illegal for an unlicensed insurer to sell auto insurance-and you may get trapped without any insurance coverage if you fail to research the company beforehand.

Remember that once you’ve purchased an auto insurance policy, it is a legal contract. So you must read the contract carefully, make sure you understand your rights and responsibilities, and ask any questions you may have. If you need more information about a topic, your insurance agent and your state department of insurance are valuable resources.

6. Before making your final decision, do your research. Before you sign on the dotted line, take advantage of the many unbiased resources at your disposal. You can find auto insurance information online, from consumer groups, at your local library, through auto insurance publications and from your state’s department of insurance.

Don’t let the shopping process deter you from finding the best auto insurance rates. Research the subject, understand the relevant issues, and move ahead with confidence. You’ll save yourself plenty of time and money.

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