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How do you find the best car insurance?

Some people are looking to buy car insurance as cheaply as possible. Others are looking for the best car insurance.

What’s the difference?

While no car insurance policy will keep you from experiencing any loss or inconvenience at all, the best car insurance policies take care of the big problems and keep them from hurting your finances permanently.

If your goal is “best” rather than “cheapest,” make sure you:

  • Buy enough liability coverage.  You personally are responsible for the costs of injuries and damage you do to others. Liability insurance covers that – to a point. A homeowner with a family and any assets needs at least $100,000 in bodily injury liability coverage if he or she injures another driver -- $300,000 for any one accident. And you should buy enough property damage liability insurance to replace the car you hit. Most experts say that need is at least $50,000. (See "Extra liability is cheap, cheap, cheap")
  • Don’t worry about ultra-low deductibles. If you have cash in the bank that’s easily available, there’s no reason not to save some money where you can.  Higher deductibles on certain coverages will lower your premium.
  • Double-check your own health insurance. If you don’t have health insurance or you have a high-deductible health insurance plan, you may need to consider medical payments or first-party benefits. These coverages also protect your passengers, who would not be covered under your liability coverage.
  • Assume that other drivers are unprepared. About 15 percent of drivers aren’t insured at all, and many of the rest have policies that meet only state-minimum requirements. Uninsured and underinsured motorist bodily injury coverages can make up the difference. (See “Uninsured motorist: What you need to know.”)
  • Protect your car.  Physical damage coverages of collision and comprehensive cover your vehicle, unlike property damage liability that only covers other people’s property that you damage.  Collision covers your vehicle if it hits, or is hit by, another vehicle or object -- regardless of fault.  Comprehensive covers your vehicle for situations that are normally not your fault.  This includes theft, fire, vandalism, striking an animal and damage sustained from acts of nature like a hail or rain storm.
  • Keep your income in mind. If you are injured in an accident that is your fault, your car insurance won’t make up for any lost income unless you have work loss or similar coverage.
  • Consider your life insurance situation. Accidental death benefit pays in the event of an accident that leads to your death or that of another family member.
  • Decide if your situation requires the extras. Gap insurance, for example, is needed only if you owe more on a loan than the car is worth. Towing and labor might be a waste on a newer car with warranty and road service plan. And rental car reimbursement might be handy if your family has only one car, but unnecessary if you have a spare car to use if yours is out of commission.
  • Shop around.  Available limits, discounts and coverage options vary from one car insurance carrier to the next.  To get the best car insurance you need to find the car insurance company that is best suited for your needs. 

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