|Decide Which Coverages You Need
Auto insurance needs are unique to a person’s life situation and may change over time. One of the best things to do before comparison shopping is to brush up on the coverages found in auto insurance policies. To review some of the basics, check out the NAIC’s consumer education website InsureUonline.org. If you plan to use current coverages as a guide, learn more about your declarations/information page here.
A few coverage options that should match up quote to quote:
- Liability Limits – Liability covers the other driver in an accident, so your needs are based on the assets you have to protect. Evaluate your situation and choose a limit accordingly. Most states have a minimum required liability limit which you can find out by contacting the state insurance department.
- Personal Injury Protection (PIP) – PIP pays medical expenses, rehabilitation expenses and lost wages for you or your family following an accident. No-fault states require PIP coverage. Your state insurance department knows if PIP must be purchased.
- Uninsured Motorist/Underinsured Motorist (UM/UIM) – In some states UM/UIM are required. This coverage pays if you or family members are injured or your car is damaged by another driver up to the limit on your policy. The state insurance department can confirm this requirement. Whether or not it is required, UM/UIM coverage may be offered. Most companies will not allow UM/UIM limits higher than liability.
- Deductibles – Comprehensive and Collision coverages pay for damages caused in a covered accident. Both coverages may not be required, but adding either requires the selection of a deductible. This is the amount you have to pay if the covered car is damaged in an accident, so evaluate how much you can afford to pay in the future. Generally, the higher the deductible, the lower the policy premium. Find out more about the difference between comprehensive and collision for your life stage at Insure U.
- Optional Coverages – These can be anything from rental car coverage to towing services. Check for any deductibles (or co-payments) that may be apply. AAA or other auto club memberships may already include some of these coverages.
Get Your Information Together
To get a rate you will need specific information to fill out the forms. Be prepared to share information from:
- Your current auto insurance policy
- The driver’s license of all drivers
- The car’s registration
Before You Start Answering Questions
There are a variety of sites that offer auto insurance quotes. Some rate for a specific company while others let you fill out one form and get quotes from several companies.
A few things to know about getting information online:
- Because of coverage requirements, it is not easy to get online quotes in all states.
- Some websites will send the information to an agent in your area to quote and write the policy.
- Not all websites provide immediate quotes. In some cases a company representative will call to confirm the information before providing a rate. In this case, ask to have the information emailed for your records.
- If all the quotes do not have matching coverages/limits, contact the companies and ask for a revised estimate using matching coverages/limits.
- Some websites are authorized to make coverage available immediately, while others cannot, even if you have made a premium payment.
- Once you have made a payment for the policy, you should have access to a temporary identification card to keep in your car. Permanent cards and a copy of the policy should come in the mail within 60 days. Some insurers will issue the policy electronically if you mutually agree to communicate this way.
Completing the Quote Request
Complete disclosure is required, as the relationship between you and your insurer is one of mutual trust. Here are a few things that require close attention:
- Drivers/Operators – Include all drivers in the quote. If you fail to include household drivers and they are behind the wheel in an accident, the company could cancel or non-renew the coverage going forward or charge additional premiums.
- Driving Record – Generally, insurance companies ask for three years of driving history and will use a Motor Vehicle Report (MVR) to check the driving records of all named drivers. It may also use a Comprehensive Loss Underwriting Exchange (C.L.U.E.), Colossus, or similar report to check claims histories. Some companies rate your premium by measuring at-fault accidents and traffic violations (often called risk classification factors). Further, MVRs do not always reflect fault. Check all quotes for discounts or surcharges based on driving history and risk classification factors.
- Credit Rating – In most states it is legal for insurers to use credit-based insurance scores as a risk classification factor in pricing a policy. Check with your state insurance department to see if it is legal. Review your credit reports (you have three) for errors before getting a quote.
Do Some Investigating
The lowest quote may not always be the best choice, so before making a payment, do some homework.
Start by talking with friends and family about their auto insurance experience. If they are insured by one of the companies you are considering, ask about their best and worst experiences.
Then, check with your state insurance department to verify that the company and agent (if you are dealing with one) are licensed in your state. You should also inquire about complaints made against the company. The company’s complaint ratio will show how the company stacks up against other auto insurers in your state.
Get smart about your insurance needs and take the guesswork out of buying an auto insurance policy. This consumer alert is a good reference when shopping around. If you are still looking for more information or tips on how to save money, go to InsureUand choose the life stage that best fits your situation. You can also download the Consumer’s Guide to Auto Insurance.