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With so many options available from so many insurance companies, finding the right auto insurance can feel like a daunting task. But knowing how to shop for car insurance can make all the difference.
While all insurers and policies may look similar at first glance, there are important details that you need to consider before choosing the best plan for your needs.
Read on to learn how to determine what you need, how to choose an insurance company, and how to qualify for special rates.
Determine What Coverage You Need
All states except New Hampshire require property and bodily injury liability coverage to protect you against third-party claims, which is what most of the cheaper policies cover. However, a cheaper insurance policy may not be for you if you need collision or comprehensive coverage.
Collision coverage will cover the damage to your car after an accident with another driver, object, or animal, while comprehensive coverage will cover damage from storms, vandalism, and theft.
Collision and comprehensive policies are pricier than the basic third-party liability option, but they will ensure that you don’t have to pay for expensive repairs or the total loss of your vehicle.
Insurance policies are not one-size-fits-all, so speak with a few insurance companies to determine exactly what coverage you need.
Research the Insurance Company
It’s always a good idea to research the insurance company you’re considering purchasing auto insurance from. If an insurer’s prices are too good to be true, they probably are.
Look for online reports on independent rating sites like Trust Pilot to ensure that you don’t choose an insurance company with bad customer service or a poor record of paying for claims.
Researching the company’s financial health is also important to make sure that the company won’t go under and leave you in the lurch.
When deciding on an insurance company, request quotes from at least three providers. You can request quotes online, by phone, or by working directly with an insurance broker.
Comparing quotes is vital because different insurers’ prices vary greatly – even for the same level of coverage. The cost of auto insurance differs so much because each insurer uses its own formula to calculate a policyholder’s risk – which is the likelihood that the insured will file claims.
Some insurance policies calculate risk by assessing the policyholders’ credit score, while others may determine their price by the car you drive or where you live.
Ask About Reduced Rates and Discounts
Most insurance companies offer special prices and discounts – so be sure to ask if you qualify for a lower rate. If you have never been in an accident and you have a good driving score, you may get a reduced price.
Additional discounts are often offered if you meet annual low-mileage thresholds. If your car has extra safety devices, you could also qualify for lower premiums.
When comparing insurance policies, ask for a list of discounts on offer – it could make an enormous impact on what you pay every month for your car insurance.