You’re ready to shop for insurance once you’ve figured out how you use your car and what your priorities are. Comparing policies from at least three different insurers is generally a good idea. You’ll want to think about the basics, like the coverage and price, but you should also look into potential insurers. The following are the most crucial considerations.
Types and Amount of Coverage
When purchasing an insurance policy, make sure to compare apples to apples. The types and amounts of coverage should be consistent across all of the policies you examine. When one policy offers $50,000 in property damage liability coverage, another just $30,000, and a third $100,000, it’s difficult to make a fair comparison.
The following are some of the coverage options you should think about getting, although some are optional:
- Primary liability coverage, which includes coverage for bodily injury and property damage
- Medical payment coverage
- Collision coverage
- Uninsured motorist coverage
- Comprehensive coverage
Assess potential policies for additional features that may be useful, such as glass coverage (which often comes with no deductible) or reimbursement for a rental car.
Price and Deductibles
The cost would, of course, be a major factor when comparing insurance policies. You would be surprised at how much prices differ, so get multiple quotes. Look at the payment schedule in addition to the premium price—the actual cost of the policy. Will there be an additional charge if you pay monthly?
Is there a discount if you pay for the whole year at once? When you’re comparing prices, keep in mind the deductible—the amount you’ll have to pay out of pocket before your insurance kicks in. In general, choosing a higher deductible would reduce your premium.
Evaluating Insurance Companies
While price and coverage are important considerations when purchasing auto insurance, it’s also important to consider the reputation and financial stability of potential insurers. First, double-check that an insurer is licensed in your state by going to the insurance division’s website, where you can also look up information on consumer cases made against insurance companies.
You can also look at review websites and ask friends about their experiences with the same insurance company. Finally, spend a few minutes checking to see if potential insurers are financially stable. This information will be provided by financial rating agencies. In many cases, online tools will also provide rating information.
