Sometimes it’s just simpler to choose the auto insurance provider your friends use or the one whose advertisement you’ve seen on television the most recently. But it’s doubtful that’s the right course of action. Like any business, insurance providers vary widely in a number of ways, including rates, coverage, hours of operation, and the timeliness of their claims processing. Shopping around will help you find the best cost, coverage, and service for your needs.
However, don’t enter the process naively. When you shop around, you need to know what questions to ask because not every agent you speak with will provide you comprehensive information on their coverage and all of your options. Good agents will take care of that, while less-than-good ones will simply cover the fundamentals. To accurately compare plans, you must ask a variety of questions.
However, if you’re like the majority of people, you don’t know everything there is to know about insurance (how’s that for confusing?). The following list of 10 questions might help you stay focused while looking into insurance providers and will guide you toward the best policy for your needs.
What types of coverage do I require?
You must first obtain any coverage that your state requires. The majority of states just require liability insurance, which pays for the costs of anyone who is hurt or killed in a car accident you caused, as well as damage to their automobile, any property damage, and any associated legal costs. But take into account these extra forms of protection as well:
- Collision. No matter who was at fault for the collision, this covers repairs to your car. Typically, you are required to pay the deductible, which is a predetermined sum of money you agreed to pay before the insurance provider covers the remaining costs. Only if your car is newer should you consider collision coverage. Consider that you had a $3,000 older vehicle with collision insurance that costs $200 a year with a $1,000 deductible. After paying the $1,000 deductible, you would receive $2,000 if your automobile was declared a total loss. Not a great payback, that. However, if you own a more recent vehicle valued at $30,000, you would receive $29,000 after paying the $1,000 deductible. That’s much better!
- Comprehensive. Comprehensive covers damage to your car caused by things other than collisions, like fire, vandalism, natural disasters, and theft. Normally, this coverage also has a deductible. The worth of your car will determine whether or not it makes sense to acquire comprehensive coverage, and you may determine what that value is by consulting an internet source like the NADA Guides at www.nadaguides.com. Every year, review the worth of your car and your collision and comprehensive insurance.
- Protection against uninsured and underinsured drivers. These coverages, which are also known as UM and UIM, can be mandated by your state. UM and UIM, which are less expensive than collision and comprehensive, pay for car repairs in the event that you are struck by an uninsured or underinsured driver. There is usually a $3,500 cap on the amount you can get back even though there is no deductible.
- protection from personal injury. If someone attacks you, this insurance will cover your medical bills and missed wages. It will also cover your medical expenses if you are hurt while riding in another person’s vehicle. Although you can choose the least coverage if you’re in good health and have a disability policy, this is a very vital coverage to have.
9: How do I rate my risk?
Your insurance rate is determined by a number of criteria that determine how big of a “risk” you are to the insurance provider, or how probable it is that you will file a claim. Your rate will increase the greater the risk you represent. Companies use information about your age, sex, driving history, criminal history, credit score, and place of residence to assess your risk. Are you young or old (two demographics known for frequent collisions)? It will cost extra. Several speeding citations under your belt? Ditto. reside in a neighborhood with a high crime rate where auto thefts in particular are prevalent? once more unfortunate. Look around to see which insurance provider will provide you the best deal.
8: Who will my insurance cover to use my vehicle?
There are many people who ignore this query. What occurs in the event that your 15-year-old, who is learning to drive, is in a collision? Do you have insurance? What if a friend steals your car and collides with another vehicles? Are any accidents you cause covered if you’re self-employed and use your car for business purposes, such as delivering pizzas or rushing to the bank? Make sure you are aware of the response because each insurer and/or state handles these circumstances differently [source: Jones]. While you’re at it, ask the representative what happens if you have an accident in a rented automobile or if you borrow someone else’s car.
7: What is my deductible going to be?
Before your insurance provider will cover the remaining costs if you are in a vehicle accident and submit a claim, you’ll most likely have to pay a set amount of money (your deductible). According to Car Insurance Rates, typical deductible amounts are $0, $100, $500, $750, $1,000, and $1,500. By increasing your deductible, you can reduce your premium (your annual or semi-annual insurance payment). Because you might never be involved in an automobile accident, carrying a larger deductible in return for a reduced insurance rate can be a smart choice. Just be careful not to set your deductible so high that, in the event of an accident, you are unable to afford to pay it; otherwise, your car won’t be fixed.
6: Do you provide any specials?
Almost all insurers provide a variety of discounts, but you shouldn’t assume your agent will always give you the ones you are eligible for. Asking about the discounts the business offers and then asking to have the ones you qualify for credited to your account are frequently necessary steps. A clean driving record, having a “good student” (typically a young person up to age 23 or 25 who earns at least a B average in school), having certain safety features in your car, such as air bags or a car alarm, are all frequently given discounts (sometimes called credits), as well as for buying other insurance from the same company, typically homeowners and umbrella insurance. Additionally, you may be eligible for discounts from some businesses if you routinely park your car in a garage, drive an eco-friendly hybrid, are a member of a reputable professional group, or even have graduated from a particular institution or university. Yet again, you must inquire in order to receive the savings.
5: What payment alternatives do I have?
You can indeed afford vehicle insurance. However, if you could pay the price in monthly instalments as opposed to a single annual payment, it would be much simpler on your budget. Or perhaps quarterly payments would be best. Ask your agent about all of the available payment methods. A minimum of annual and six-month premium payment choices are provided by the majority of insurers. When providing more frequent payment alternatives, businesses frequently tack on a few dollars’ worth of fees or, alternatively, give discounts to customers who pay their entire annual amount in one go. If you are aware that paying annually will be difficult, be sure to ask about your choices.
4: What will my car be worth to you?
Too many individuals ignore the importance of a particular car. A vintage or cherry-red sports automobile you’ve always wanted? Go for it now that you have some additional money! Or are you enjoying the fact that you found such inexpensive wheels in the junkyard? Everything is fantastic until your insurance agent tells you that your fancy hot rod will cost twice as much to insure than your stodgy sedan, at which point you realize you forgot to factor it into your budget. Or your agent claims that because the history of your junkyard jalopy is unknown, it is actually uninsurable. Oops. Find out the value of the car you want to buy before you buy it, and then do at least a quick insurance check to determine whether you can afford the car and the insurance. Perhaps the automobile wasn’t quite so hefty after all.
3. Do you offer 24-hour claim assistance?
Even if no one is hurt, being in a car accident is stressful. Avoid putting yourself in a stressful situation by having an accident on a Saturday night and your insurer not being open until Monday morning. Make sure the insurance company you choose provides 24/7 claim reporting, both online and via phone (toll-free number).
Additionally, find out whether there are any unique conditions for submitting a claim. Generally, you only need to provide your name and address, as well as the names and addresses of any witnesses to the accident who were also harmed, as well as some general information about the type of loss or claim you are making. Having your policy number on hand is also helpful.
2: Will you cover the cost of genuine OEM parts if my automobile is in an accident?
I bet you didn’t think of this one! Most individuals believe that when their automobile is damaged, their insurance will cover the cost of having it fixed with “original equipment manufacturer” (OEM) parts, which are identical parts that come from the specific manufacturer of their car. That’s a hazardous assumption, though, as the repair might have used “aftermarket” parts, which are auto parts designed to fit any type of vehicle and not just one specific make and model. Since aftermarket components are less expensive, some insurers favor using them. Additionally, although some jurisdictions require insurance to cover OEM components, others do not. Some insurance companies utilize both types of components, which makes issues more complicated. When it comes to safety components like air bags, for instance, they will spend more money on OEM parts, but they will employ aftermarket components for less important components like door handles and fenders.
Even if an insurer only offers coverage for aftermarket items, you shouldn’t automatically discount them, especially if their prices are reasonable and they have an excellent track record. You might not even care. And if you do, if you find OEM parts’ average prices to be more appealing, you can always choose to pay a little extra to upgrade from aftermarket components to OEM parts. It’s simply best to be aware of their policy in advance.
1: Do you have a physical location where we may meet?
Your company undoubtedly seems to be handled primarily online or over the phone these days. However, meeting with an agent in person to go over issues can be quite helpful when talking about complex issues like insurance. Sometimes understanding something only requires reading it out loud. Ask potential agents if they have a physical office where you can meet since people who meet with their agent in person frequently experience superior customer service. Inform them that you would like a yearly evaluation of your personal insurance when you are there. Any competent agent should be willing to provide this service upon request, but a genuinely good agent will automatically provide it. Annual assessments ensure that you are always carrying the coverage you need and are not paying for any policy that is no longer necessary.
