Comparing Different Auto Insurance Policies Intelligently



Posted June 27, 2011

Prior to selecting a car insurance policy, you need to be able to understand it fully and completely. There are a number of things that you should take into consideration before making your final selection. Namely, price, service, and reputation and financial stability of the insurance carrier.
No one wants to pay more for their auto insurance than is necessary, and the best way to determine whether your premium is fair is to shop around. Remember also that going with an inexpensive insurer, but one that has poor reputation for service may come back to haunt you should a claim arise. Keep in mind that you may stay with your insurance company for years, so it is wise to invest time now to shop around and do your due diligence.

Do Your Research

Whether purchasing auto insurance online or offline, be sure to do your research on the background and history of the insurance company. Make sure you are looking at a reputable insurance company and ensure that they pay their claims on time, as many insurance companies are known to take excessively long to approve claims. Most state insurance departments will have complaint records on their websites to show consumers which insurers had high complaint rates in your state. There are good and bad insurance companies and if you do the research, you can sort through the ones with a poor reputation or many consumer complaints. While the level of service this does not seem as important as price at the time of purchase, reliable and efficient assistance is of prime importance at time of loss or accident.

Understand the Coverage

This is very important. You want to make sure that you are aware of your state minimum so that you get the insurance that is required by state law. You should also be aware of the coverage that you actually need - most people will want and need more than the state-mandated minimums. For example, if you are leasing or financing your car, your lender or lessor will require collision and collision coverage in addition to the required liability coverages. Understand also that there are ways you can reduce the price of your premium – by reducing your coverage level or raising your deductible. Also, be sure that you are requesting quotes from different insurers for the exact same level of coverage. Otherwise, you'll be comparing apples to oranges.

Request Multiple Quotes

While it may be time-consuming, it is advisable to do your research before selecting a policy to comparison shop. You want to speak with as many insurance companies as you can and receive quotes on policies from as many of those as possible. Different companies charge different rates for the same coverages. The key is to know what you need before you start and to find out how much various companies charge. The more quotes you get, the better chance of getting the best, most cost-effective policy out there. Quotes are completely free. Be sure to have all of your personal information ready including your driver’s license number and current insurance information when requesting a quote.

Check for Applicable Discounts

When comparing auto insurance policies and their quotes, it is important to make certain that you are requesting the same discounts as well as the same level of coverage from one insurance company to the next. The level of discounts you receive from one carrier to the next may make the key difference in which insurance company will be the most cost-effective for you. The below is a list of the most common discounts available for drivers:
  1. Multiple vehicles on the same policy.
  2. Driver Education courses. A discount is given younger and older drivers who can prove completion of a certified driver-training course.
  3. Good Student. Students who earn a B average or better tend to be more responsible drivers and may be eligible for this discount.
  4. Safety Devices. Certain safety devices can result in lower cost by preventing accidents or limiting their severity. Discounts may be available for air bags, automatic seat belts and anti- lock brakes. Proof that your car is equipped with these items must be shown.
  5. Low Mileage. The fewer miles you drive, the less chance you have of being involved in an accident. Some companies offer discounts for drivers who participate in car pools or drive to and from work on a limited basis.
  6. Good Driver/Renewal Discount. Drivers with a good driving record are given discounts by most companies as are those who renew their policy with the same insurer.
  7. Auto/Home Package. Some insurers offer a discount on one or both policies if an individual buys both homeowners and auto coverage from them.
  8. Anti-Theft Devices. The installation of devices or systems that deter theft or vandalism may also qualify you for a policy discount. 

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