Shopping for auto insurance involves more than calling up the first company that comes to mind and buying the coverage they recommend. You can save hundreds or thousands of dollars a year by shopping around, choosing the right amount of coverage for your situation, and asking about discounts.
Auto insurance companies determine rates differently, so gather quotes from several sources before making a decision. An online comparison website can help by doing some of the legwork for you. By typing in some basic information, you can have free instant access to quotes from several companies with minimal effort on your part. Quotes can differ by hundreds of dollars even with the same basic variables, making this stage of the process one of the best ways to save.
Keep good records about quotes and discounts offered from each company to help you make your final decision. It’s important to give each company the same information so that the quotes you receive are comparable.
All states require drivers to maintain auto insurance coverage in order to obtain a license, but the requirements vary as to how much coverage you’ll need. Depending on where you live, you’ll need to purchase property damage and bodily injury coverage and you may be required to purchase uninsured/under insured motorist insurance as well. Even if your state doesn’t require this type of coverage, you may want to include it in your policy to protect yourself if another driver is uninsured.
Although not required, you may want to purchase auto insurance coverage beyond what your state requires. Collision insurance pays for damage to your car when it hits or is hit by another vehicle or object. Comprehensive insurance takes care of damage caused by events other than collisions, such as theft, fire, or water damage.
Your deductible can make a big difference in your overall insurance premium. Higher deductibles mean lower premiums, but you’ll also pay more up front if you have an accident. Choosing a low deductible protects you from huge repair bills if your car is damaged, but you’ll pay higher premiums each month.
Most auto insurance companies offer discounts for having a good driving record, taking a defensive driving course, or purchasing multiple policies from the same company. Ask each company you’re considering what discounts they offer and factor the savings into your overall premium rates in order to find the company that can give you the best deal.
Good customer service can be just as important as cheap auto insurance rates, so make sure you call each company to evaluate their customer service before you buy a policy. Also, choose a company with a good reputation that has been in business for several years rather than buying the cheapest available policy from a company that might not be able to pay out on a large claim.
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