Auto Insurance Buying Guide: 10 Steps to Success

Here’s a quick rundown of the ten steps, followed by a more comprehensive explanation.

Find out what your state’s minimum requirements are for insurance coverage.
Determine whether or not you need to increase your insurance limits in order to safeguard the assets that are important for you.
If you have any outstanding tickets or points on your license, take a look at them.
Get a copy of your current insurance policy to see how much you’re being charged.
Get multiple quotes from insurance websites and individual companies of interest to you to compare prices. Follow up with insurance companies to learn more about their policies.

Consider asking for discounts.
Visit your state’s insurance department website, review consumer surveys and talk to your family and friends about the reliability of the insurance companies you’re considering.
Before finalizing a policy, make sure you thoroughly review it.
Remember to get rid of your old insurance plan.

Insuring your first car or renewing a policy after a long absence, you want to make sure you’re adequately protected in case of an accident, but you also don’t want to overpay for coverage. Due to their lack of time, many people end up paying too much for car insurance. Despite how it appears in commercials, it’s not a particularly pleasurable experience.

If you do some comparison shopping, you can save hundreds of dollars a year. To compare the cost of basic coverage for his two old cars, one of our editors used an online rate comparison service and found quotes ranging between $800 and $800 a year. It might be worth your while to shop around for a new insurance policy if your current provider is charging you thousands of dollars because of a few tickets or an outdated negative credit rating.

How Much Coverage is Enough?
Start by determining the amount of coverage you require before searching for the best policy. For this reason, you should check your state’s requirements to see what kind of coverage you’ll need. How Much Car Insurance Do You Need? provides a comprehensive list of state-specific requirements and a detailed explanation of the various types of insurance. Check out this guide from the National Association of Insurance Commissioners before you get behind the wheel for the first time. Make a list of the various options you’re considering.

Once you know what’s required, you’ll be able to determine what you want. Your choice will be based on how comfortable you are taking on a certain amount of risk.

When it comes to protecting your assets, experts recommend that you get enough liability coverage. When it comes to bodily injury liability coverage, let’s say you have $50,000 but $100,000 in personal assets. If you’re at fault in an accident, the other party’s attorneys may sue you for the $50,000 in unpaid medical bills that you don’t have coverage for.

If one person is injured in an accident, the general recommendation is $50,000 bodily injury liability; if more than one person is hurt, $100,000 bodily injury liability is recommended; and if property damage is caused, $25,000 is recommended. Let your financial situation serve as your guide in this case, as well. Don’t overpay for insurance if you don’t have any assets that a lawyer can seize.

Depending on your driving habits, you may need more or less insurance coverage. People with a history of car accidents, speeding tickets or daily commutes on treacherous winding roads should receive more comprehensive coverage. When your car is involved in an accident, collision coverage will pay for the cost of repairs (a tree, lamppost or fence, for example). This type of insurance covers damage that isn’t caused by a collision, like damage caused by fire or theft. Damaged windshields are also covered.

Be aware that you don’t need collision and comprehensive coverage. In this scenario, let’s say that your car is older, you have a clean driving record, and it’s unlikely that your car will be totaled in a collision. There is a risk of theft because you have to park in a less-than-desirable neighborhood for work. Then you could forego collision insurance in favor of comprehensive coverage.

Secondly, it is necessary to review your coverage.
Get the information you need from your current policy or by contacting your car insurance provider. Make a note of your current insurance coverage and the cost. Since you’ll get quotes for both yearly and monthly premiums, keep track of the total cost of your insurance. You now have a target to aim for.

Step 3: Verify Your Driving History
Make sure you are aware of how many tickets you have recently accrued The department of motor vehicles in your state should be able to tell you how long that speeding ticket has been on your record. Wait to get quotes if your driving record is about to be improved by the removal of a ticket or points. A poor driving record is a surefire way to raise your insurance premiums.

Competitive Quotes are solicited in Step 4.
It’s finally time to hit the malls. Allow yourself at least one hour to complete this task. Your driver’s license and registration number, as well as the policy number you currently have, should be readily available. To begin, you can use online services. An insurance rate quote can be obtained by entering your information into an online form and then requesting quotes from several different insurance providers. Keep in mind, however, that not all insurance companies are included in these one-stop shopping sites of the type described above.. You can get a quote directly from the company’s website or by calling its toll-free number if a recommendation from friends and family or other research points to a winner.

It takes about 15 minutes to fill out a quote form for each customer. If you spend two hours shopping and save $800, you’re effectively earning $400 an hour, so it may be worth your while.

You may not get immediate quotes when you use these sites. You never know when a company will get back to you. You may be referred to a local agent by some companies that are not “direct providers,” who will then provide you with a quote.

Gathering Company Data is the fifth step.
When you’re looking into companies, be sure to take detailed notes so that you can compare things like pricing and coverage later on. The following should be kept in mind:

Prices for a variety of coverage options, including annual and monthly rates Maintaining consistent coverage limits allows you to compare costs and levels of protection side-by-side.
To get answers to questions you couldn’t find online, dial the insurance company’s 800 number.
The payment policy of the insurance company. What is the due date for the payment? What options are there for making a payment? Is there any consequence if you are late with your payment?
This is the sixth and final step. Make a Lot of Calls
Make a few phone calls after you’ve done your research online. Get in touch with the businesses from which you were unable to obtain an online quote. You can save time and effort by conducting your research over the phone rather than online, as long as you have your driver’s license and vehicle registration with you. You should always ask for an email confirmation of a price quote you receive over the phone.

Step 7: Search for Deals and Savings
Make sure to look into all of your discount options when you’re shopping. A good driving record, your car’s safety or security equipment, and certain occupations or professional affiliations are all factors that insurance companies consider when determining premiums. Pay-as-you-drive plans are now being offered by some companies at lower rates. Having a good GPA among the family’s young drivers can result in significant savings from some insurance companies. If you insure your house and car with the same company, you’ll typically save money.

Companies should be evaluated in Step 8
With this information, you can now make an informed decision. When comparing insurance policies, it’s important to remember that cost isn’t the only factor to consider. How can you tell if a company is financially stable? If you have a claim, how do you know if the insurance company will treat you fairly?

To get a better sense of an insurance company’s reputation for fairness, financial stability, and customer service, here are some places to look.

Information about insurance companies, including closed complaints, licensing information, and key financial data, can be accessed through the Consumer Information Source of the National Association of Insurance Commissioners. You can also look up consumer complaint ratios and fundamental rate comparison surveys at the insurance department of your state.
To learn more about a company, contact an independent insurance agent.
A.M. Best’s financial strength ratings are a good place to start when researching an insurance company’s financial health.
Check out J.D. Power and Consumer Reports surveys on customer satisfaction (subscription required).
Consult with family and friends to learn about their insurance policies and whether or not they are happy with them. In particular, inquire about the treatment they received from their insurance providers when they filed a claim. Is the service they received honest and fair? Or was it a pain in the ass to resolve the issue?
Next, you should go over the policy again.
Read over the policy’s main points once you’ve done your research and narrowed it down to a single company. Additionally, it’s important to check if “new factory,” “like kind and quality,” or “aftermarket parts” are allowed for body shop repairs, according to the Insurance Consumer Advocate Network. You may want to think twice about signing up with this company if they require you to keep your car for a certain amount of time, especially if it is a newer model. It’s better to know up front that your insurer will cover the cost of original equipment manufacturer (OEM) parts than to have to argue about it later on in the claims process.

Step 10: Terminate Your Existing Policy
Get a new policy from a different insurance company, then cancel your current policy. As a safety precaution, keep your insurance card in your wallet or in the glove compartment of your car, depending on where you live.