(MP) You need the kind of car insurance that adequately covers you if you get in an accident, but you don’t want to pay more than you have to. I present some good buying tips here to save you lots of headaches and hopefully some money too. Trust me when I say – do comparison shopping before you buy, it could literally save hundreds of dollars a year. I used an online rate-comparison service got basic coverage quotes for two cars that ranged from $1,006 to $1,807 — a difference of $801 a year.
Before you shop check with your state insurance department to see if it has a tort system or a no-fault system. The system your state has will decide what kind of insurance you should be looking for. The three basic coverage’s sold under the tort system are bodily injury liability insurance, property damage liability insurance and uninsured motorists coverage. In a no-fault state coverage’s will vary. Under a no-fault system the insurance company pays you for losses sustained as a result of injuries in an accident, regardless of who is at fault. Now let’s a look at the Guide …
10 Tips to Buying Car Insurance
1. How Much Coverage You Need
Start by figuring out the amount of auto coverage needed. This varies from state to state. Take a moment to find out what coverage is required in your state. You will find a list of each state’s requirements and an explanation of the various types of insurance in WSJ’s “How Much Car Insurance Do You Need?”
2. Shop Around Before You Buy
When shopping for auto insurance, premium quotations are useful tools for comparing products of different companies. Set aside at least an hour for this task. Have at hand your current car insurance policy, your driver license number and your vehicle registration. When asking for price quotations, it is crucial that you give the same information to each agent or company. The agent will usually ask the following information: description of your vehicle, its use, your driver’s license number, the number of drivers in your household, the coverages and limits you want. Go to an online site to get insurance rate quotes. Type in your information and begin to build a list of companies for comparative quotes.
3. Look for Discounts
Car insurance companies offer a variety of discounts based on a number of factors:
- A clean driving record can net you some big savings — up to 45 percent according to Allstate, and 26 percent according to Geico — because it shows you’re less of a risk.
- Safety and security features can also translate into savings. front and side-impact airbags reduce your risk of injury, and security alarms decrease the risk of your vehicle being stolen, therefore limiting the insurance company’s exposure.
- If you have a homeowners’ insurance policy, getting car insurance with the same company may lower rates even further. Some insurers says that premiums may fluctuate based on how much you drive, your age, sex and marital status, and your credit history. You can see where your credit scores stand for free on Credit.com.
4. Review Your Current Policy
Read through your current policy or contact your insurance company to get the information you need. Write 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.
5. Check Your Driving Record
You should know how many tickets you have had recently. 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, wait until that happens before you get quotes, it’ll improve your driving record. Remember, a bad driving record drives up the price of car insurance.
6. Check For Optional Coverage
The most commonly recognized coverage’s, in addition to the basic liability package, is collision and comprehensive coverages. Collision pays for physical damage to your car as a result of your auto colliding with an object such as a tree or another car. This is expensive coverage and is not required by law. But, if you’re following our don’t waste money guide you probably can afford it. Comprehensive pays for damage to your car from almost all other causes, including fire, severe weather, vandalism, floods and theft. This coverage will also cover broken glass or windshield damage. Comprehensive coverage is less expensive than collision, but is also optional. Other optional coverage’s include medical payments alongside your health insurance coverage, rental reimbursement coverage and towing and labor coverage. Plus, check to see if your policy provides for a loaner car. If you have an accident and need a rental car, having coverage that gives you an allowance for a rental will in the long-term be cheaper than paying out the full price for a rental.
7. Understanding Deductibles
Deductibles mean a lower premium, but think about what an accident would cost you. Buying the smallest amount of coverage allowed by law (or by your lender) will save you money, but it won’t save you anything in the long run if you ever have a claim. For example, if you choose a high deductible policy, you’ll have cheaper premiums. Let’s suppose you have $5,000 in repairs. A $1,000 deductible means you’ll have to pay out-of-pocket for 20 percent of the costs. If you have a $250 deductible, you’ll only be paying one-twentieth of the costs. You’ll have to weigh that with the difference in premiums for high-deductible policies.
8. 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 verifying that it has 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 repairs, says Dennis Howard, director of the Insurance Consumer Advocate Network. If the policy has such a requirement, 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, and not try to fight later, when you have a claim.
9. Protect Yourself
Once you have selected car insurance coverage you’ll need an insurance agent or company. There are steps you can take to make certain you get your money’s worth. Before signing an application for any insurance coverage, call your state insurance department and verify that the company or agent are licensed to do business in your state. It is illegal for unlicensed insurers to sell insurance, and if you buy from an unlicensed insurer, you have no guarantee that the coverage you’re about to pay for will ever be honored. Also ask if there’s been any complaints about the agent or company.
10. Cancel the Old Policy and 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.