The best way to shop for car insurance is to do so annually by using comparison tools located on specific websites. These tools allow you to examine the costs of several providers so you can determine which option works best for your budget and needs.
What Type of Auto Coverage Do You Need?
Everyone's driving situation is different, but auto insurance acts as financial protection. If you get into a serious accident, the bills for injuries and damage can be quite expensive. If you cause the accident, the victims could sue you.
Before you dive into shopping for car insurance, you should know what your state minimum coverage amounts are. That way, you can compare the costs accurately.
Liability coverage protects you from that worst-case scenario, so selecting the right coverage is one of the most important parts of your insurance quote comparison. NerdWallet recommends that you have as much liability coverage as your net worth.
When looking at liability coverage, note that it comes in threes. You might see something like 250/500/250 in a policy. Think of it as individual injuries/total injuries/property damage.
You probably noticed that liability coverage doesn't pay for injuries that you or your passengers sustain. That's why oftentimes people opt for full-coverage insurance. This isn't one type of coverage but refers to policies that include additional coverages. Some examples of add-on coverage include the following:
- Personal injury protection (PIP). Not every state mandates this coverage, but it goes toward paying your medical expenses regardless of which driver is at fault in case of an accident.
- Uninsured and underinsured motorist coverage. This coverage helps if you're injured by a driver who either lacks or doesn't carry enough insurance. It covers your medical expenses.
- Medical payments. This coverage applies toward medical expenses for everyone in your vehicle, regardless of who is at fault.
- Collision coverage. This covers the costs associated with collisions involving another vehicle or fixed object such as a fence or pole.
- Comprehensive coverage. This covers your vehicle against physical damages not involving an accident, such as weather incidents, falling objects, or crashes with an animal.
- Gap coverage. This type of coverage pays the difference between a loan amount on the vehicle and its value after depreciation.
- Roadside assistance. If your vehicle breaks down, this covers the cost of towing and tire changes.
How Do You Comparison Shop for Car Insurance?
One of the most common ways to comparison shop for auto insurance is doing so directly via the insurance company's website. The downside to this option, though, is that you only can view one company's rates.
Expect to compare auto insurance quotes via specific websites more frequently. Lead generation sites oftentimes sell your information, and agencies might not provide you with the entire cost. Only comparison sites give you a free and no-obligation way to save money based on your driver profile and financial needs.
Comparison tools via certain sites, such as The Zebra and Insurify, show auto insurance premiums from different companies to help you locate the best rate. This way you can view the prices of several companies and find the best price for your needs and budget. In fact, using Insurify can save you an average of $585 annually.
These tools should also include the state's minimum car insurance requirements pre-loaded. States that require PIP are typically referred to as no-fault states, which means that if an accident with injuries occurs, each driver makes a claim with their own company to pay for them. Beyond the PIP limit, the at-fault driver's liability insurance covers the rest.
What Information Do You Need to Get a Car Insurance Policy?
When shopping for car insurance, most insurers require specific pieces of information to calculate your rates. Most companies use the following:
- The date of birth of all drivers on the policy
- Driver's license numbers of all drivers
- Driver's records of all drivers
- Insurance history of all drivers
- Vehicle Identification Number (VIN) of all vehicles
- The address where the vehicle is kept
How Can You Secure Low Insurance Rates?
By taking a few additional steps, you might be able to secure even lower car insurance rates. Some of these steps include the following:
- Raise your deductible. A higher deductible means you will have lower payments. If you have both collision and comprehensive coverage, opt for a higher deductible.
- Install an anti-theft device. Putting in a car security system can lower the chances of your vehicle being stolen.
- Maintain a high credit score. Your credit score plays a role in your rates unless you live in California, Hawaii, Massachusetts, and Michigan. Insurers see a strong credit history as an indicator that you are acting responsibly and will file fewer claims.
- Bundle your insurance policies. Some companies allow you to bundle your auto policy with homeowner's or renter's insurance.
- Take a defensive driving course. Insurers love drivers who have a clean driving record, and taking this course can help you become a better driver.
- Drive less. Being on the road less can reduce your chances of getting into an accident.
- Ask for discounts. Many companies offer different types of discounts. Common ones include deals for members of professional organizations, pay-in-full discounts, good driving discounts, and multi-vehicle discounts.
- Consider local and regional insurers. According to NerdWallet, just four companies (Allstate, GEICO, Progressive, and State Farm) control more than half of the country's auto insurance business. However, smaller insurers such as Auto-Owners and Erie Insurance oftentimes have higher customer satisfaction ratings and lower rates.
- Opt for user-based insurance. If you're a safe driver who doesn't travel many miles, a usage-based program, such as Allstate's Drivewise or Progressive's Snapshot lets your insurer track your driving in exchange for potential discounts.
When shopping for car insurance, don't rely on only one quote from an insurance provider. Compare at least four prices to give you a better understanding of pricing. It's also recommended that you shop around and compare car insurance quotes annually. That way you can make sure you're getting the best prices available.
Sources:
https://www.nerdwallet.com/insurance/compare-car-insurance-rates
https://insurify.com/blog/car-insurance/the-best-and-worst-sites-to-compare-car-insurance-quotes/
https://www.caranddriver.com/car-insurance/a35437661/allstate-car-insurance/
https://www.caranddriver.com/car-insurance/a31268853/what-does-full-coverage-car-insurance-cover/
