Search Cars for Sale

5 Steps for Choosing Auto Insurance


Shopping for and choosing car insurance is something like going to the dentist. Afterward, all we really remember is the discomfort.

With all its mouse print, addendums, and wherefores, any insurance policy is a confusing mishmash of language seemingly designed to confound all but the most experienced experts.

Sure, finding the ideal company and the right agent can eliminate some of the anxiety from the process. But doing some research on your own will elevate your knowledge, as well as confidence, providing some peace of mind.

The Best Way to Choose Car Insurance

If you never purchased auto insurance before, buying a car will trigger the need for auto insurance. Because the car itself can affect insurance costs, shopping for your insurance before purchasing a car makes sense.

Any one of several life changes, according to Kimberly Lankford, a contributing editor for Kiplinger Personal Finance Magazine and author of “The Insurance Maze,” like a new teenage driver, moving, a new job, and so forth should also spark shopping around your auto insurance business.

“The company that offered you the best deal before,” she said, “may not be the best with new changes.”

Now check out the steps for purchasing auto insurance.

1. Determine How Much Coverage You Need

Minimum-liability limits established by the state where you live and collision-coverage requirements of your auto-loan lender take some of the coverage decisions out of your hands.

Most states have minimum coverage limits for liability. Some states require minimums such as $10,000 for personal injury protection and $10,000 for property damage liability, as in Florida. In Maryland, minimums are much higher with $30,000 per person, $60,000 per accident, and $15,000 for property damage.

Although such amounts will meet the state’s minimum requirement, they won’t be adequate in the event of a severe accident.

Lankford recommends at least $250,000 per person and $500,000 per accident.

The amount needs to be large enough to protect your assets, such as your home and investments. If your coverage isn’t sufficient to cover expenses and you get sued, anything you own can be in jeopardy.

A single person with few assets may be tempted to skimp on the liability coverage, but anyone with a job runs the risk of having their income garnished, even future earnings.

There are other ways to save money on your auto insurance. Scrimping on liability coverage shouldn’t be one of them.

2. Evaluate Auto Insurance Companies

When choosing car insurance, the cost is essential in your decision-making process. But cost alone may not be the only reason to go with an insurance provider.

“You get what you pay for” is often as valid with car insurance as it is with anything else.

No matter how cheap the insurance premium is, what you want is attentive customer service in the event of a loss, whether through accident, theft, or act of nature. Sitting on the curb with your car smashed to smithereens in an intersection at midnight is not the time to discover your insurer doesn’t have a 24-hour hotline.

Several websites like Compare.com describe the better-known insurance companies with ratings for each. Choose the carriers you will consider from those with A ratings, which typically indicate the company is financially sound.

Most states keep track of complaints against auto insurance carriers through their attorney general’s office, consumer affairs office, or insurance commissioner’s office. This is typically done in a complaint-to-premium ratio, and the lower the ratio, the more reliable the company.

It may take a little searching to find the information. For example, at Ohio.gov, it required five mouse clicks to get to the information. But it’s a good tool for weeding out unresponsive companies.

Of course, ask your friends and relatives which auto insurance they use and their service experience.

3. Compare Car Insurance Costs

Now that you’ve found a few companies that seem reliable, it’s time to compare costs for choosing the auto insurance policy.

On the internet, conduct cost-comparison research and shop around for the lowest cost insurance. Start by getting quotes online from insurance providers in your area, such as Geico, State Farm, Allstate, etc.

Make sure while doing auto insurance research that you look for discounts that can help curb costs. Discounts could include things like pairing auto insurance with your home insurance, good-driving discounts, and a safe driving course to lower insurance premiums further.

Know that things such as a poor or no credit history and bad driving records will negatively impact your rates. On the other hand, good credit and a shiny driving record will positively impact your car insurance rates.

4. Find an Agent

At this point in your research, you’ve probably narrowed your choices to the two or three least expensive, most reliable companies.

Start with the least expensive company and find an agent. Independent agents represent some companies who may represent several carriers, and others have dedicated offices and agents.

Most insurance company websites offer an agent locator, providing a list of agents close to you. This is the best place to begin. Choose three to five agents near you and call for an appointment. Insist on meeting with the agent and not an office manager or some other employee.

Let them know you are interviewing for a new insurance agent. If they don’t make time for you at this stage, they probably won’t when you need them most. Move on to the next agent.

When meeting with the agent, get some background. Ask about their track record in auto insurance. Find out how long they’ve represented the company and how long they’ve been in the area. Remember, at some point, you may need them as an advocate for you. Do you feel comfortable with the agent and do you trust them?

You have a list of agents; keep moving through them until you find the one that fits.

5. Ask About Discounts

Before giving the agent you’ve chosen your business, ask about car insurance discounts. Insurers offer discounts for many reasons, such as a paid-in-full plan, bundling your auto policy with home or other cars, and good-driver history.

Some companies, like Geico, give discounts for staying accident-free for five years, and vehicle features such as daytime running lights and airbags. Make sure you get every discount for which you qualify.

If you follow these steps, you will find an insurance company you can count on at a rate you can afford.

Then all you need to do is choose your car insurance deductible or the amount you will pay if your car gets damaged in an accident, by a fallen tree, or another mishap.

Related Car Insurance Stories:

FAQ

How to Choose a Car Insurance Policy?

To choose an auto insurance policy, you’ll want to consider your state’s minimum coverage limits, and that will be a starting point to help you select options. From there, consider the age and mileage of your car and what it’s worth. If it’s newer, your loan provider may require comprehensive and collision coverage. Then all you need to do is get quotes and look for discounts.

What is the Best Way to Compare Car Insurance Costs?

If you want to compare costs for auto insurance, the best way is to shop around and obtain quotes from different providers. Check also for any complaints against the insurance agency.

How to Choose the Best Car Insurance Policy

To choose the best insurance policy, determine how much coverage you need, shop around with different insurance providers and check consumer complaints, compare costs, find an agent, ask about discounts, and then choose your deductible.

Russ Heaps
Russ Heaps is an author specializing in automotive, financial and travel news. For nearly 35 years he has covered the automotive industry for newspapers, magazines and internet websites. His resume includes The Palm Beach Post, Miami Herald, The Washington Times and numerous other daily newspapers through syndication. He edited Auto World magazine, and helped create and edit NOPI Street... Read More about Russ Heaps

Sign up for Autotrader newsletters

The best cars and best deals delivered to your inbox

Email Address 

By subscribing, you agree to our privacy policy

Where You Can Buy

Loading dealers...

Leave a Comment

Most Popular Articles

2020 Hyundai Sonata Hybrid: First Look

The 2020 Hyundai Sonata Hybrid jumps to the head of the hybrid class.

Best Truck Deals: June 2022

These are the best deals on trucks for the month of June 2022.

Here Are 5 Great 1980s Performance Cars for Sale on Autotrader

Looking for a fun 1980s car? Look no further.

Search By Style

More Articles Like This