How To Differentiate Which Car Insurance Policy Fits Best For You
Car insurance is legally required in most states, but you can decide which car insurance policy fits best for you. Unfortunately, this is easier said than done since most insurance company offerings may sound the same. When searching for car insurance, learn about the different providers and their plans to help you find the best fit.
How To Compare Insurance Policies
Comparing insurance policies means understanding the terms and what’s covered. With so many different providers available, you must first narrow down your options. Next, you can compare insurance providers by reading reviews and reported complaints online. Once you’ve narrowed your options to 3-5 providers, you can start looking at your different plan options. Here’s how to compare insurance policies.
Know The Types Of Car Insurance
There are multiple types of car insurance, and not everyone needs the same policies. What’s most important is determining the type of car insurance you need for your vehicle. The five main types include:
- Liability: Liability insurance is necessary for every driver because it helps cover the costs of injury to damage to others or their property if you’re responsible for an accident.
- Collision: Collision insurance helps you pay to fix your car if there’s an accident. Not everyone needs collision insurance, especially if your current vehicle is old and you’re considering buying a new one soon.
- Comprehensive: Comprehensive car insurance is for damage that’s not caused by an accident. For example, if your car is stolen or a tree limb falls on it during a storm, comprehensive coverage will help pay to fix it.
- Uninsured Motorist Coverage: Often sold with underinsured motorist coverage, both types of insurance help you save money if there’s an accident and the other driver doesn’t have insurance, or their insurance won’t cover it.
- Medical Coverage: Medical coverage and personal injury protection cover the costs of any medical care in case of an accident.
Again, you must have liability coverage. However, the other types of car insurance are optional unless you’re paying off an auto loan or are under a lease. Additionally, many policies come with add-ons, including roadside assistance or gap insurance.
Rates
You should get a quote from at least three insurers to help you understand what to expect in terms of your monthly rate. If you have points on your driving record, you may be able to get more affordable rates from companies that specialize in high-risk drivers. On the other hand, if you have a relatively clean driving record, you can easily compare your options by requesting quotes online or on the phone. Once you get your quote, look at the different variables in the policy that affect the cost of your monthly bill.
You should also understand what can affect your rates. While you may get more competitive rates from some companies than others, factors that affect your rates include:
- Deductible: The amount of money you pay out of pocket if there’s a car accident. The higher the deductible, the lower the insurance rate.
- Age: Younger drivers have less experience and, therefore, are riskier to insure.
Gender: Men have higher rates than women, likely due to statistical data related to accidents. - Demographics: Where you live can also affect your rates. In general, those living in cities have higher rates of accidents. Additionally, you’ll face higher rates if you live in a high-crime area where your car is more likely to get stolen.
- Claims: Drivers prone to accidents will pay more for car insurance, so if you want to keep your rates low, consider only filing claims when there’s a major accident or expense involved.
- Moving Violations: Drivers who speed will pay more for car insurance because speeding is against the law and potentially dangerous.
- Type Of Vehicle: more high-end vehicles cost more to repair and more to insure.
Cost And Coverage
The more coverage you have, the more your car insurance will cost. You’ll need to consider your finances when looking at deductibles and what’s covered under different policies. If you have money saved for emergencies, you may be able to reduce your monthly insurance cost. In addition, the more expensive your vehicle, the more expensive your coverage. However, since expensive cars are more costly to fix, you may need more coverage to help you pay for repairs. Too little coverage also limits you in case of an accident, and you may end up paying for someone else’s hospital bills out of pocket.
Ultimately, you must weigh the financial risks and rewards of going for a lower or higher deductible. For example, if you can afford a higher deductible to cover a major accident, you can save on your premiums. However, if your current vehicle is cheap to repair, a higher deductible may not be worth it.
Lowering Insurance Costs
While every insurer is different, you can expect lower costs by inquiring with each company about discounts. Many companies offer discounted rates for:
- Good drivers
- Low mileage
- Students
- Multi-car or multi-policy holders
If you’re not a regular driver, you can find a different type of car insurance in which you pay per mile. With a pay-per-mile policy, you’ll be charged a low base rate plus a per-mile fee, and low mileage could save you hundreds of dollars every year.
Convenience
Another thing to consider when shopping for car insurance policies is convenience. No one wants to write a check and send it in the mail to their insurance company every month. Instead, your insurer should provide their customers with convenient options to pay their bills or file a claim online or with an app. Sending money to your insurance provider monthly is easy, and you already do it with your other bills, so your insurer should give you the option to take care of administrative tasks online to help you speed the process along, whether it’s paying your bill, filing a claim, or asking for customer service help.
Consider Customer Service
Accidents happen, and sometimes they’re out of your control. You’ll need to contact your insurance company to file a claim when there is an accident. If your insurance company has poor customer service, you may have long waiting periods until you see any reimbursement for your expenses. In addition, poor customer service also means a poor, frustrating experience overall, something you won’t want to deal with if there’s ever an incident.
You can learn about a company’s customer service quality by reading reviews online or calling them yourself when you’re ready to discuss your insurance options. Is the person you’re talking to knowledgeable and friendly? If so, that’s a green flag that they’ll help you process claims easily.
Final Thoughts
The type of car insurance you need depends on several factors, including your financial situation, vehicle, and how much protection you want. Before you choose the first insurance company that comes to mind, do your research and learn everything you can about the company’s process. In addition, shopping around can ensure you get the best rates for the coverage you need.
The Author’s name is Ashley Nielsen. She earned a B.S. degree in Business Administration Marketing at Point Loma Nazarene University. She is a freelance writer who loves to share knowledge about general business, marketing, lifestyle, wellness, and financial tips. During her free time, she enjoys being outside, staying active, reading a book, or diving deep into her favorite music.
Car Insurance Policy FAQ
Q1: What Is The #1 Insurance In America?
A1: The top insurance company varies, but well-known options include State Farm, Geico, and Progressive. The “best” choice depends on your specific needs and preferences.
Q2: Who Is Cheaper Geico Or Progressive?
A2: Costs differ based on individual factors. To find the best rates, obtain quotes from both Geico and Progressive, then compare based on your unique circumstances.
Q3: What Is The 50-100-50 Rule For Liability Insurance?
A3: The “50/100/50” rule indicates liability coverage limits of $50,000 per person, $100,000 per accident for bodily injury, and $50,000 for property damage. Assess your liability coverage needs accordingly.
Q4: Is Progressive Insurance Good?
A4: Progressive is reputable with competitive rates. Its suitability depends on your specific requirements. Review its reputation, and customer feedback, and compare quotes to determine if it meets your needs.
Q5: What Is The Average Cost Of Car Insurance In The United States?
A5: Car insurance costs vary widely, but the average is around $1,500 to $1,800 annually. To get an accurate estimate, request quotes from insurance providers considering your personal factors.