By Ronald J Agrella
The auto insurance industry is a multi-billion dollar a year business and insurers are competing hard for your business.
For better or for worse, price is one of the two main factors in purchasing auto insurance. In a 2021 InsuraMatch survey conducted by Lightspeed GMI research company of insurance customers across the United States, 38.2 percent of respondents said the price was more important than any other factor when choosing an insurance carrier. The other major factor was service, though only 1 in 5 respondents said it was the most important factor.
Today, getting an online auto insurance quote is relatively fast and simple. However, given that so much is at stake to earn your business, the actual quote provided to you may not give you the full scope of what you are, and aren’t, covered for.
One of the best pieces of sound advice is to have your current auto insurance policy in front of you before beginning the quote process. You can see your current coverage levels, discounts, and be able to compare the actual quote to what you have already.
Here are some additional tips on what to look for when you get your auto insurance quote:
Reduced Liability Protection
Be aware of the liability coverage levels you’re offered. In some cases, you may be offered or choose state-mandated minimums, which may not be enough to cover you in case you need to replace your car, if you’re sued in an accident, or if you’re hurt in a crash.
You also want to factor in your assets. If you have a $300,000 home than you’ll want enough bodily injury liability coverage as a safety net in case you’re sued by someone who is hurt in a crash. In other words, if you only have $50,000 worth of liability protection, your assets may be at risk in case of a major lawsuit. If you don’t have many assets or don’t own a home, then you may want to consider reducing coverage, although there is a chance that a jury could decide to garnish your wages if you don’t have enough coverage.
The company may also quote you with little or no comprehensive coverage. Comprehensive reimburses you for loss due to theft or damage unrelated to an accident. It also covers damage from fire, many natural contacts, or a collision with an animal.
Watch That Deductible
Policies typically carry a collision deductible that can range from $250 to $1,000. The higher your deductible, the less you pay on your insurance premium.
If you can afford to pay $1,000 or a higher deductible if you’re involved in a collision than it’s a great way to save money. However, if paying a high deductible is something you can’t afford - then consider reducing it.
Many online quotes will give you a figure based on a higher deductible so read any quote carefully before purchasing (or binding) your policy.
The Length of the Policy
Be careful that you understand the duration of the insurance policy that’s quoted to you. Depending on the insurance carrier, you may get a quote for a six-month or one-year policy. Because a quote for a six-month policy is generally half the price of a one-year policy, the price may inadvertently lead you to believe the company is much less expensive, even though it may not be. In some states, you could even be offered a 3-month or one-month policy.
Read the quotes carefully to determine the length of the policy and then do the math so that you can compare all carriers equally.
Property Damage Coverage
Collision insurance will pay for your car but property damage liability pays for damage done to the other vehicle. It’s important not to be low-balled here either. In 2017, the average transaction price for a light vehicle in the United States was about $32,500. So you’ll want to have enough liability protection on your vehicle to cover damage to newer vehicles. Many drivers choose to have more coverage in case a more expensive make and model of car is damaged.
This protection will also cover you in case you damage another type of structure, such as a business, home, municipal utilities, etc.
Uninsured/Underinsured Motorist Coverage
Reducing or sometimes eliminating this coverage is another way to reduce your overall quote. However, it can be far more costly if you’re hit by a driver with little or no insurance coverage.
This coverage helps protect you if you need help paying for medical bills or have lost wages due to being out of work.
Most insurance companies, ask detailed questions to offer you the most deductibles they can and earn your business. However, not all carriers offer the same discounts.
For instance, some insurance carriers offer discounts for multiple vehicles on the same policy, anti-lock brakes, full payment, loyalty customers, daytime running lights or if you have a hybrid or alternative-fuel vehicle. You should know which carriers offer for which discounts and take advantage of them.
You may also qualify for additional discounts because of the state you live in.
Do you know who the carriers are?
The bottom line is to read and understand the quote very carefully and ask questions.
Before signing on the dotted line, research the insurance carrier to understand if they have good customer service, a strong reputation, and more. There are also many good regional insurance carriers and companies that have competitive pricing and customer service over other carriers that have national brand recognition, and we have these carriers at Insurance Exchange.
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