Most people don’t realize that there are dozens of different types of auto insurance. Some offer you better benefits than others, and some are a complete waste of money. Before you purchase your auto insurance, it’s important to understand the difference between the different kinds of policies and figure out which one best suits your needs. If you’re in the market for new auto insurance, this guide will help you pick the best one.
Get several quotes
Finding cheap auto insurance is not always as easy as you think. Prices can vary drastically, depending on several factors. The easiest way to find a good deal is to compare quotes from several different companies using an online quote form or over the phone. Although some of these are often time-consuming, it’s important to get several estimates in order to find one that best suits your needs and budget. It’s also a good idea to set price points for what you are willing to pay—and ask your potential carriers if they offer anything within those parameters. If not, there may be another company out there that can provide coverage at a better rate than you imagined.
Know your coverage levels
There are several different coverage levels you can choose from when it comes to auto insurance, each of which offers varying degrees of protection. Find out which one best suits your needs and then shop around until you’ve found a plan that has what you want at a price you can afford. Remember: You don’t have to choose a high-end level right off the bat. It’s better to start with something more basic and increase your coverage as necessary once you get further into life.
Get detailed quotes
One of your first stops should be an online quote comparison site, which will tell you what other companies are charging for auto insurance and allow you to choose a policy from them. This gives you more control over your auto insurance than relying on your current provider, who may not offer competitive rates or may charge exorbitant prices. Do some research about auto insurance requirements in your state; many states require that every driver purchase a minimum amount of liability coverage in order to drive legally. If you don’t purchase enough, it’s possible that you won’t be covered if a claim is filed against you and could put future premiums at risk.
Don’t skimp on the deductible
When it comes to auto insurance, a deductible is what you pay out of pocket before your insurance kicks in. Higher deductibles will save you on monthly premiums but do keep in mind that you may end up paying more out of pocket if an accident happens. Depending on your situation, you may be better off choosing a higher deductible and lower monthly premium (or vice versa). For example, if your monthly premium is $200 and your deductible is $300 but another car hits yours from behind and totals it, it could cost you up to $5,000 out of pocket. However, if your monthly premium was only $50 per month but your deductibles were also much lower ($500), then the damage could be covered by their insurance after yours kicks in.
Shop around every six months
Most insurance companies look at your driving record, age, and any claims you’ve filed in order to determine what they’ll charge you. All of these factors will change every six months, so it makes sense to shop around once or twice a year. You may be able to save several hundred dollars simply by finding a better-suited insurance company. If you’re unsure whether your current insurer is giving you a fair deal, do some price comparisons and see how much money you could save with a new provider. Before switching providers, though, make sure that switching auto insurance policies won’t result in an increase in monthly payments or an increase in deductibles and out-of-pocket expenses; these are costs that can end up making your switch costly.
Only cover what you can afford to replace
Buying auto insurance is just like buying home insurance. It covers you in case something bad happens, but most people don’t want to think about it unless they have a problem. The same is true with your car. So how do you know how much insurance coverage you need? The best way is to make sure that if something does happen, it won’t bankrupt you or take too big of a bite out of your savings. To cover your bases, cover only what you can afford to replace because cars depreciate quickly and used cars are almost always cheaper than new ones.
Pick a company with an A+ rating from J.D. Power
If you’re looking for an easy way to choose a car insurance company, look no further than J.D. Power’s annual report, which ranks insurers on customer satisfaction. J.D. Power surveys consumers after they have filed a claim with their insurer and asks them about their experience dealing with their carrier. The report also reviews claims histories and complaint volumes of insurance companies, as well as rates and premiums charged by those insurers. Although there are many ways you can choose your car insurance company—by price, brand, or company reputation—the one survey you should pay attention to is J.D.’s Power ratings.
Shop with confidence
When choosing a car insurance policy, you should shop with confidence. You’re putting your financial future in an insurance company’s hands. That’s why it’s important to choose a provider that stands out above its competitors. We did all of the shopping around for you so you can quickly compare rates and find a policy that works best for your needs. Here are our top picks: * Travelers – Best overall * GEICO – Best price * Progressive – Best service
There is no best auto insurance—it’s important to choose a plan that fits your lifestyle and driving habits. Use tips from above as a starting point when you begin shopping around for auto insurance, but always ask questions and do research before purchasing anything. Your personal circumstances may affect how much coverage you need, so don’t be afraid to consider alternatives. In addition, most states require at least some basic coverage; find out what’s required in your state and whether you should purchase more than what’s minimum—and do your research!—to avoid violating any laws or getting into trouble with credit card companies or banks.