When it comes to auto insurance, you want to be adequately covered if you get in an accident, but you don’t want to pay more than you have to. Regrettably, many people are doing just that, simply because they don’t want to spend time shopping for car insurance. It’s not characteristically pleasing, after all, regardless of how it looks in commercials featuring disgruntled cavemen and joke-cracking spokespeople.
But by doing some comparison shopping, you could save hundreds of dollars a year. If you’re paying thousands to your current insurance company because you have a couple of tickets, an accident, or an out-of-date and uncomplimentary credit rating, shopping your policy against others might be well worth the effort. Look at it this way: You can transform the money you save into buying something you’ve wanted or needed for a long time.
Step 1: Decide How Much Coverage You Need:
To find accurate auto insurance, start by figuring out the amount of coverage you need. This varies from state to state, so take a second to find out what coverage is required where you live.
Once you know what’s mandatory, you can decide what you need. Some people are quite vigilant. They base their lives on worst-case scenarios and insurance companies love that. Insurance companies are in the risk business, and they know a policyholder’s likelihood of being in an accident, as well as how likely it is for a car to be damaged or stolen. The insurance company crunches the information it has collected over decades into actuarial tables that give adjusters a quick look at the likelihood of just about any occurrence. You don’t have those tools at your disposal, so your decision will depend on your own degree of comfort in assuming a certain level of risk.
Professionals recommend that if you have a lot of assets, you should get enough liability coverage to protect them. Let’s say you have $50,000 of bodily injury liability coverage but $100,000 in personal assets. If you’re at fault in an accident, attorneys for the other party could go after you for the $50,000 in medical bills that aren’t covered by your policy.
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident, and $25,000 property damage liability (usually expressed in insurance shorthand as 50/100/25). Here again, let your financial circumstances be your guide. If you have no assets that an attorney can seek, don’t buy coverage unnecessarily.
Your driving habits might also be a consideration in determining the coverage you need. If your past is filled with crumpled fenders, or if you have a lead foot, or if you make a long commute on a treacherous winding road every day, then you should get more complete coverage. Collision coverage pays for damage that your car experiences in an accident or damage from hitting an inanimate object (a tree, light post, or fence, for example). Comprehensive coverage addresses damage that didn’t occur in a collision — such as from fire, theft, or flood. It also covers damaged windshields.
Keep in mind that you don’t have to buy collision and comprehensive coverage. Let’s say your vehicle is older, you have a good driving record and there is little likelihood that your car would be totaled in an accident, but a high likelihood of it being stolen. Then you could buy comprehensive coverage and skip collision insurance.
Step 2: Review Your Current Insurance Policy
Read through your current policy or contact your auto insurance company to get the information you need. Jot down the amount of coverage you have now and how much you are paying for it. Take note of the yearly and monthly cost of your insurance, since many of your quotes will be given both ways. Now you have a figure to beat.
Step 3: Check Your Driving Record
You should know how many tickets you have had lately. If you can’t remember how long that speeding ticket has been on your record, check with your state’s department of motor vehicles. If a ticket or points you earned are about to disappear, thus improving your driving record, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record.
Step 4: Solicit Competitive Quotes
Now it’s time to start shopping. Set aside at least an hour for this task. Have at hand your current insurance policy, your driver’s license number, and your vehicle registration. You can begin with online services. If you go to an online site to get a quote for an insurance rate, you can type in your information and begin to build a list of companies for comparative quotes. Keep in mind that not all insurance companies participate in these one-stop-shopping sites, however. If a recommendation from friends and family or other research points to a company that you think might be a winner, you can go directly to its Web site or call its toll-free number to get a quote.
Each quote form takes about 15 minutes to complete. It might be well worth your time since if the entire shopping process takes you two hours and you save $800, you’re effectively earning $400 an hour.
Or to take the pain out of doing so, call Insurance Professionals of Arizona, and we can do it for you! ALL FREE!
Step 5: Gather Quotes and Company Information
While you’re researching companies, take careful notes so you can easily make price and coverage comparisons. Keep a list of:
• Annual and monthly rates for the different types of coverage. Make sure to keep the coverage limits the same so you can make apples-to-apples comparisons for cost and coverage.
• The insurance company’s 800 telephone number, so you can get answers to questions you couldn’t find online.
• The insurance company’s payment policy. When is the payment due? What kinds of payment plans are available? What happens if you’re late in making a payment?
In later steps, you’ll add some more information to this list.
Step 6: Look for Discounts
When you’re shopping online, make sure you explore all your options relating to discounts. Insurance companies give discounts for such things as a good driving record, your car’s safety or security equipment, and certain professions or professional associations. Some companies are now offering lower rates if you enroll in “pay as you drive” plans. Some will give considerable discounts for young drivers in the family who have high grade-point averages. (You can use this as an incentive to your teen drivers and offer to share the savings with them.) Also, consider using the same insurance company for home and auto policies. That will usually get you a better price.
Step 7: Review the Policy Before You Sign
When you’re done your research and zeroed in on a company, read over the main points of the policy. In addition to confirming that it contains the coverage you’ve requested and priced, it’s a good idea to find out if the policy states that “new factory,” “like kind and quality” or “aftermarket parts” may be used for body shop repairss. If the policy has such a prerequisite, think hard about whether this is the company for you, particularly if you own a relatively new car that you plan to keep for a while. In this case, it’s best to know at the outset that the insurer will pay for original manufacturer parts, rather than try to fight later when you have a claim.
Step 8: Cancel Your Old Policy; Carry Your Proof
After you have secured the auto insurance policy you want, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or the glove compartment of your car.
Finally, here’s a quick checklist to keep you on track:
• Determine your state’s minimum insurance requirements.
• Consider your own financial situation in relation to the required insurance and consider whether you need to increase your limits to protect your assets.
• Review the status of your driving record — do you have any outstanding tickets or points on your driver’s license?
• Check your current coverage to find out how much you are paying.
• Get competing quotes from Internet insurance Web sites and individual companies of interest to you.
• Inquire about discounts.
• Evaluate the reliability of the insurance companies you’re considering by visiting your state’s insurance department Web site, reviewing consumer surveys, and talking to family and friends.
• Review the policy before finalizing it. Remember to cancel your old policy.
Again, we at Insurance Professionals, are here for you, give us a call, send an email, or stop in and we will look for the best rate possible for you and your family or business!