Question: What advice do you have for me as I’m about to start comparison shopping for car insurance quotes? What is most important to think about as I go into this?
Answer: There are four things I find very important when you going to compare car insurance rates. They are:
- Know what coverages you want.
- Know what limits you want.
- Know what deductibles you want.
- Give accurate information
You’ll be able to shop for the same items with every company that you obtain car insurance quotes from – thus, you’ll be comparing “apples to apples.”
If you simply start shopping for car insurance rates and aren’t sure of what your needs are or give inaccurate information on the quoting form, you won’t be able to discover which car insurance company can actually give you the best rates.
But if you do it right, there is no faster or better way to save money. The difference in identical coverages from one insurance company to another is usually hundreds of dollars -- and often, it's thousands.
First, you should be aware of what state car insurance coverages are required where you live.
In some states, only bodily injury liability and property damage liability mandated. These are the coverages that compensate others that you may harm in an auto accident.
Other states require that drivers carry uninsured and/or underinsured motorist bodily injury coverages. This will cover certain medical expenses, up to your limits, if you’re hit by an at-fault uninsured driver or a driver whose liability coverage limits is insufficient to cover your medical expenses.
A few states also require motorists to carry uninsured motorist property damage (UMPD) that will cover damage to your vehicle, up to the stated limit, by an at-fault uninsured motorist.
If you live in a no-fault state, you’ll also be required to carry personal injury protection (PIP) as part of your policy. No-fault states require drivers to use their own PIP as their primary medical coverage if injured in an accident – regardless of fault.
Once you know what coverage you have to carry, then you can decide what optional coverage is right for you and your vehicle.
The most commonly purchased optional coverages are collision and comprehensive, the physical damage coverages that protect your car.
Collision covers damage to your car sustained from it hitting, or being hit by, another vehicle or object. Comprehensive covers theft, fire, vandalism, animal strikes and damages caused by nature events, like a hurricane or hail storm.
These coverages will cover the cost of repair or the actual cash value (ACV) of your vehicle if it is deemed a total loss, minus your deductible amount. If you have financed your car, your lienholder will require you carry both collision and comprehensive.
Other popular optional coverages you may want include:
- Gap – If you owe more than your vehicle is worth and your car is totaled out, this will cover the difference between ACV and the outstanding loan amount.
- Custom parts and equipment – Aftermarket items you place in or on your vehicle, such as stereo, custom wheels or custom paint, typically aren’t covered unless you add on this coverage.
- Rental car reimbursement – Collision and comprehensive coverage don’t come with the use of a rental car paid for by your car insurance policy. If you want that as part of your policy, add this coverage.
- Medical payments – This coverage is helpful if you aren’t required to carry PIP in your state but want some medical coverage for you and your passengers if you’re in an accident. It covers certain medical expenses for injuries sustained in an auto accident regardless of fault.
Most car insurance coverages come with a limit of your choosing. The limit is the maximum amount that coverage will pay out for a claim.
There is a minimum amount required by the state, but if you have assets to protect and can afford more coverage, then it’s always better to buy more. For instance, it’s recommended that drivers carry liability limits of at least $100,000 per person, $300,000 per accident for bodily injury and $50,000 for property damage (written as 100/300/50).
Many insurers, or the state itself, require that your insured/underinsured motorist coverage limits be set at the same limits as your bodily injury liability limits.
A deductible is an amount you must pay before coverage benefits start up and your insurance company takes over to pay the remainder of the covered loss. Deductibles are typically associated with collision and comprehensive coverage, as well as some PIP policies.
A higher deductible will help lower your rates while a lower deductible will raise rates. I advise you to take on a deductible high enough that you can save some money but low enough that you can still afford to pay it out if you need to use the coverage.
Be accurate and compare quotes
Once you’ve decided on what coverages, limits and deductibles you want, you can get start to compare car insurance quotes -- just make sure you give accurate information.
If you leave out a ticket you had or the collision claim you put in last year, then your quote will be inaccurate and have to be adjusted once the insurer pulls your information and finds out the truth.
To save time when shopping around, try getting car insurance quotes from multiple car insurance providers all at once like what we offer.