Auto Insurance: Shop And Save

Shopping for auto insurance can be a daunting task, especially if you haven't done it in a while. However, it is a great way to save money. All you need is some basic information, an idea of the coverage you need, and a few minutes to compare quotes.

The best way to shop for auto insurance is to understand your coverage and premium options from different companies. It is always a good idea to obtain quotes from several insurers as rates can vary significantly. When obtaining quotes, make sure to provide accurate information about your driving history, vehicles, and other relevant details. Remember to only deal with licensed agents and brokers, and ensure the insurer is licensed to sell insurance in your state.

In addition to price, consider other factors such as the insurance company's claim practices, reliability, and the services provided. Compare the types of products and coverages offered to meet your individual needs. For example, consider whether you need comprehensive, collision, or higher liability limits.

Shopping for auto insurance can be made easier by using online comparison sites, but be cautious as some sites may sell your information to insurance companies, resulting in unwanted spam and contact. A trusted site, like The Zebra, can provide you with accurate quotes from multiple companies without selling your data.

Understand your coverage options

Understanding your coverage options is essential when shopping for auto insurance. While a policy with only auto liability coverage will be cheaper, it might not satisfy your needs. Here's what you need to know about the different types of coverage available:

Liability Coverage

Liability coverage is required in nearly every state and includes bodily injury liability and property damage liability. Bodily injury liability covers costs associated with injuries and death caused by you or another driver while operating your vehicle. Property damage liability, on the other hand, reimburses others for damage caused by you or another driver operating your car to another vehicle or property, such as a fence or building.

Medical Payments or Personal Injury Protection (PIP)

This coverage provides reimbursement for medical expenses for injuries to you or your passengers and may also cover lost wages and other related expenses. While it is frequently required in many states, even if it's not mandatory in your state, consider adding it for greater financial protection.

Uninsured Motorist Coverage

Uninsured motorist coverage is crucial and will reimburse you when an accident is caused by a driver without insurance or in a hit-and-run situation. You can also purchase underinsured motorist coverage, which will protect you if another driver doesn't have sufficient insurance to cover the costs of a serious accident.

Collision Coverage

Collision coverage is optional but reimburses you for damage to your car resulting from a collision with another vehicle or object when you are at fault. While it won't cover mechanical failure or normal wear and tear, it will cover damage from potholes or if you roll your car.

Comprehensive Coverage

Comprehensive coverage is another optional coverage that protects against theft and damage caused by incidents other than collisions, such as fire, flood, vandalism, hail, falling objects, and even asteroid strikes!

Glass Coverage

Windshield damage is common, and some policies include no-deductible glass coverage for windshields, side windows, rear windows, and glass sunroofs. You can also purchase supplemental glass coverage if needed.

Gap Insurance

If you lease or finance your vehicle, dealers or lenders may require you to purchase both collision and comprehensive coverage. However, keep in mind that these only cover the market value of your car, not what you paid for it. If your car is totalled or stolen, there may be a "gap" between what you owe and your insurance coverage. Gap insurance can pay the difference in these situations.

Compare premium quotes

Comparing premium quotes is a crucial step in shopping for auto insurance. Here are some detailed tips to help you compare premium quotes effectively:

• Understand your coverage options: Opting for a policy with only auto liability coverage will get you a cheaper rate, but it might not meet your needs. Consider factors such as whether you lease or finance your car, and the age and condition of your vehicle.
• Determine your car insurance limit: This is the maximum amount your insurance will pay out for a claim, and it varies for different coverages. For liability coverage, selecting your state's minimum required coverage will reduce your rate, but ensure it's sufficient to cover any potential accidents.
• Choose your deductible: Your car insurance deductible is the amount you need to pay toward a claim before your coverage kicks in. Typically, this applies to comprehensive, collision, and gap insurance coverages. A higher deductible will lower your premium, but ensure it's still affordable for you.
• Compare premiums from different insurers: Obtain and compare premium quotes from multiple insurance companies. Ensure that you're comparing quotes with the same coverages, limits, and deductible amounts to get an accurate picture. Tools like Progressive's AutoQuote Explorer® can assist in this process.
• Don't shop by price alone: While cost is important, it's not the only factor. Consider the insurance company's claim practices, reliability, services provided, and the specific types of products and coverages offered to meet your individual needs.
• Consider discounts: Ask about potential discounts, such as bundling policies, insuring multiple cars, having a clean driving record, agreeing to receive documents online, or owning a car with certain safety features.
• Frequency of shopping for insurance: It's beneficial to shop for car insurance at least once a year, as rates change frequently. Additionally, if you're adding a teenager to your policy, look for insurers that offer discounts for teen drivers.

Don't shop by price alone

While price is an important factor when shopping for auto insurance, it shouldn't be the only consideration. Here are some reasons why you shouldn't shop for auto insurance based on price alone:

• Insurance company practices and reliability: Different insurance companies have different claim practices, and it's important to choose a company that is reliable and provides good service. Ask friends and relatives for their recommendations, and check consumer reviews and complaints to get an idea of a company's reputation and reliability.
• Types of products and coverages offered: Consider your individual needs and the specific types of coverage offered by the insurance company. For example, you may want comprehensive or collision coverage, or higher liability limits to protect your assets. Many insurers offer various packages of optional coverages and benefits, so make sure to review these options to find the best fit for your needs.
• Dividends and merit rating plans: Some mutual insurers may pay dividends to policyholders, which can affect the overall value of the policy. Additionally, many insurers have merit rating plans, charging higher premiums to drivers with accidents or traffic violations on their records. Be sure to understand how these factors can impact your overall costs.
• Payment options and fees: Find out if the insurer allows premium payments in installments and if there are any associated fees. Also, inquire about late payment fees or charges for checks returned due to insufficient funds. Understanding these payment details can help you make an informed decision.
• Financial stability: It's important to select a financially stable insurance company that can honour its commitments. Check the financial health of insurance companies using rating agencies like AM Best and Standard & Poor's. This will give you added confidence in the company's ability to pay out claims.

Ask about discounts

Discounts are a great way to save money on your auto insurance. There are a variety of discounts available that you may qualify for, and it's always worth asking your insurance provider to review what's available to you. Here are some common auto insurance discounts to ask about:

Multi-Policy Discounts

If you buy multiple policies from the same company, you can often get a discount. This is also known as "bundling" and can include combining car insurance with home insurance, renters insurance, motorcycle insurance, or even life insurance. The discount for bundling car and home insurance is usually one of the biggest, often ranging from 5% to 25% off.

Multi-Car Discounts

Insuring multiple cars with the same insurance company can also result in a discount, typically advertised as up to 8% to 25% off.

Vehicle Safety Discounts

If your car has safety features like anti-lock brakes, airbags, and daytime running lights, you may be eligible for a discount. Airbag discounts can be substantial, offering up to 40% off your medical payments or personal injury protection coverage. Cars that are less than three years old may also qualify for a new car discount, often between 10% to 15%.

Anti-Theft Device Discounts

If your car has anti-theft features, you can typically receive a discount on your comprehensive coverage. This can range from 5% to 25% off. Examples of anti-theft devices include GPS-based systems, stolen vehicle recovery systems, and VIN etching, which permanently engraves the vehicle identification number on the windshield and windows.

Good Driver Discounts

Insurance companies often reward safe drivers with discounts. For example, Geico offers up to 26% in potential savings if you haven't had any accidents in five years. Some companies also offer discounts for taking a defensive driving course, especially for mature drivers over 50 years old.

Good Student Discounts

If you or your student driver is enrolled full-time in high school or college with good grades, you could qualify for a discount. This usually requires maintaining at least a B average and being between the ages of 16 and 25. Good student discounts can range from 8% to 25%.

Student Away at School Discount

If your student is away at school and doesn't have a car, you may be eligible for a discount. The requirements vary, but typically the student must be under 25 years old and more than 100 miles from home, only using the family car during school vacations and holidays.

Pay-in-Full Discount

Paying your full policy term upfront can often result in a discount, with top companies offering a range of 6% to 14% off.

Electronic Funds Transfer (EFT) Discount

If you pay in installments, some insurance companies offer a small discount for using automatic withdrawals, typically ranging from 3% to 6% off.

Paperless Discount

While not as common as it once was, some insurance companies still offer a small discount if you choose to go paperless and receive your policy documents and billing electronically.

Online Quote Discount

Some companies will offer a discount if you get an online quote and sign up for a policy, ranging from 4% to 12% off.

Advance Quote Discount

Shopping around and buying a policy in advance of your current one expiring can bring about a discount, typically ranging from 2% to 15% off.

Occupational Discounts

Your occupation may also qualify you for a discount. For example, Liberty Mutual offers special policy features for educators, and Geico offers up to 15% off for military personnel.

Usage-Based Insurance Discount

Your insurance company might offer usage-based insurance (UBI), which adjusts rates based on your driving habits. If you're a safe driver, this could result in a discount of 5% to 40%.

Remember, not all discounts are automatic, so it's important to ask your insurance agent regularly to review the available discounts and determine your eligibility.

Compare rates from multiple insurers

Comparing rates from multiple insurers is a crucial step in shopping for auto insurance. Here are some detailed tips to help you compare rates effectively:

Understand the Factors Affecting Rates

Your auto insurance rates are influenced by various personal factors, including your age, gender, driving record, credit history, vehicle type, and location. Knowing these factors will help you understand why rates differ between insurers and make more informed decisions.

Gather Quotes from Multiple Insurers

Obtain quotes from several insurers to find the best value. Contact agents, brokers, or insurance companies directly, or use online tools and websites that provide sample rates. Ensure that the insurers are licensed to sell insurance in your state and that you're dealing with licensed agents and brokers.

Provide Accurate Information

When obtaining quotes, be honest and accurate about your personal details, driving history, vehicles, and current insurance coverage. This ensures that the quotes you receive are relevant and comparable.

Compare the Same Coverage Options

To make a true "apples-to-apples" comparison, ensure that each quote includes the same coverage options, deductibles, and liability limits. This way, you can be certain that any differences in price are due to variations in the insurers' rates rather than differences in coverage.

Consider Discounts and Extras

Insurers often offer discounts for various factors, such as bundling policies, insuring multiple cars, having a clean driving record, or agreeing to receive documents online. When comparing rates, consider the discounts offered by each insurer and choose the ones that apply to you. Additionally, look for extras like mobile apps or accident forgiveness that may be valuable to you.

Compare Rates Regularly

Auto insurance rates can change frequently, so it's beneficial to compare rates at least once a year. This ensures that you're keeping up with the latest rates and taking advantage of any discounts or promotions that may be offered.

Don't Focus on Price Alone

While cost is an important factor, it shouldn't be the only consideration when choosing an insurer. Look at the big picture, including the insurer's reliability, claim practices, and the services provided. Choose an insurer that offers the best combination of coverage, price, and customer service.

Frequently asked questions