Auto Insurance Star: Choosing the Best Auto Insurance
Purchasing the most reliable and least expensive automobile insurance is the goal of every person who owns a vehicle.
Most states require a certain amount of car insurance to comply with laws designed to protect the driving public, so everyone purchases car insurance. The process of shopping for and purchasing car insurance isn't difficult if you follow these steps:
- Find out the limits of insurance required in your state
- Ask friends, family, neighbors, and co-workers about their car insurance and their opinions of their insurance
- Examine licensing of the agents and insurance companies as well as the financial stability of the companies.
- Get statistics from your state insurance department regarding complaints and problems with companies.
- Narrow your choices down to the three most reliable companies
- Determine the amounts of coverage you wish to purchase – usually more than the state minimum – and prepare information to get a quotation
- Get comparable quotes from each company
- Decide upon the best auto insurance
Now you need to learn how to do all these steps so you can make an informed decision. Be sure to use the FREE search tool above to start comparing rates now!
Find Out the Limits of Insurance Required by Your State
Examine your state's insurance website to find out how much liability insurance is required by law to receive a driver's license in the state. Go to the website provided by the National Association of Insurance Commissioners (NAIC) and choose your state. The link will lead you to the insurance website for your state.
Remember that the limits recommended are the lowest that you may carry to protect your driver's license and registration in the event of a traffic stop or accident. The limits are not necessarily the ones that will protect you and your assets adequately if you are judged liable for an automobile accident in your state.
Higher limits of liability will protect you more for not much more premium.
Ask the Opinions of Friends, Family, Neighbors, and Co-Workers About Insurance
The people you know usually are aware of the costs, service, and reliability of the insurance company they have chosen. Ask them about these details and request suggestions for places you might purchase insurance.
Remember; just ask for advice because you are still gathering information about desirable places to purchase insurance.
Take into consideration that your Uncle George has three teenagers who each drive, whereas Ted in the next cubicle has toddlers who, presumably, aren't driving yet. Teen drivers can add a great deal to premiums and probably Uncle George will tell you so.
Make a list of the insurance companies recommended and jot down comments.
Examine Licensing of the Agents and Companies as well as Financial Stability of the Companies
Finding out about licensing of agents and insurance companies just requires a few searches on your computer. Find your state's insurance website. Most of them have a section that will indicate the names of agents, their licensing status, and complaints.
It is illegal to sell insurance in any state without a valid license. That's comforting, but if you don't check, you may fall victim to a scam.
For financial information about insurance companies, three main companies evaluate and rate insurance companies:
- A.M. Best – a well known rating firm
- Standard & Poors – another insurance rating firm - Click on Property/Casualty for firms that sell automobile insurance and homeowners
Checking financial status of insurance companies is a good idea because catastrophes such as Hurricane Sandy in the northeast placed a great deal of stress upon insurance companies and their assets.
Get Statistics from Your State Insurance Department Regarding Complaints and Problems with Insurance Companies
Access your state's insurance website to read the statistics with regard to complaints. States ordinarily have these statistics listed by company, indicating general types of complaints from policyholders.
Put these in your notes, too.
Narrow Your Choices Down to the Three Most Reliable Companies
Compile the notes you made about insurance companies and determine the three best companies, considering:
- Recommendations
- Financial Stability
- Statistics on complaints
You now can be certain that the insurance company you choose to purchase auto insurance from is reliable, responds well to claims, and has the fewest complaints. It's time to consider the coverage you want to carry on your automobile policy.
Suggested Automobile Insurance Coverage for a Quotation
The suggested amounts of automobile liability insurance are more than most states require. Of course, you have checked the minimums required in your state and know this. Suggested coverage:
- Bodily injury liability - $100,000 per person/$300,000 per accident for your liability in an auto accident
- Property damage liability - $50,000 per accident for your liability for damage to the property of others in an accident
- Medical payments coverage - $5,000 – pays for injuries to you and your family in an accident. This coverage responds in addition to your health insurance
- Uninsured/underinsured motorist coverage - $100,000 per person/$300,000 per accident for injury to you and your family in an accident incurred with an uninsured motorist. You might note that up to 17% of individuals on the road do not have insurance, depending upon the state in which you live.
None of the above coverage pays for your car. Of course, in an accident with someone else, he, she, or his or her insurer will be responsible for damage to your car. On the other hand- most of us, purchase cars with loans from banks or credit unions.
These entities will require that you protect your vehicle with comprehensive and collision insurance. The following are recommended, and include a brief description of the perils for which your automobile is insured.
- Comprehensive coverage – This is separate from collision because it covers such things as theft, fire, weather, vandalism, and damage from animals. Most of the things that could happen to a car short of collision.
- Collision coverage – pays for just that – collisions, whether someone runs into you or you run into something or someone else.
Both comprehensive and collision deductibles are recommended. The larger the deductible, the more credit you receive on the price but be certain you can afford to pay the deductible in the event of a loss.
Getting Comparable Quotes
List the coverage you want to purchase so you won't forget them, and then go to three different agencies either to get quotes, or, if your selected companies have an on-line presence, go to their websites and request quotes. Before you do, gather the following data, and have it ready:
- Dates of birth, full names, drivers license numbers of all drivers
- Make, model, and VIN number for all the cars that you own
- Marital status and occupation for all drivers
- Average annual mileage for each automobile
- Desired insurance limits and coverage
If your quotation requests are identical, it will give you a chance to examine the costs charged by that particular insurance company and compare it with the others you are also requesting.
VIII. Determine the Best Auto Insurance
Gather the information you have collected and determine which company is the best for you.
Once you've decided, go back and ask about discounts for things such as purchasing your homeowners insurance from the same company, good student discounts, college student more than 100 miles away from home with no car, and others offered by the individual company.
You can also consider roadside towing coverage, rental car coverage, and other types of specialized coverage offered by that company. Wait until after the initial quote, though, to ask about these so you are comparing like to like.
Keep your notes with your insurance papers, and then consider going through the process next year to ensure that you still have the best coverage. Insurance policies are vital to your financial well being, so be certain to pay reasonable attention to them.
It's always best to compare rates using the FREE tool at the bottom of this page!