Your Guide to Shopping for Auto Insurance:
Shopping for auto insurance is an important task, not only to make sure you have the right coverage but to also find a rate that is the best deal for that coverage. To help you, we’ve put together a list of terms to know as well as our tips to keep in mind as you shop:
Terms to know when shopping for auto insurance:
Premium – This is what you pay every month or every six months or whatever your policy term entails. Often the more you pay, the greater your coverage. Having less coverage saves you money each month, but there will be more expenses you will be responsible for in the event you need to file a claim.
Deductible – This will be a set amount, and is how much you will pay out of your pocket before insurance begins covering the rest of the expenses or claim. Usually, the deductible is very much related to your premium. The higher your premium, or the more you pay every month, the lower your deductible will be and the sooner the insurance company will begin paying when you put in a claim.
Bodily Injury Liability – This coverage is to protect you if you injure or kill someone in an accident. It is for those other than you and those in your vehicle and could be used towards medical expenses or even attorney fees in the case you are sued.
Property Damage Coverage – Not all companies offer this, but this coverage will help cover expenses from damage caused to someone else’s car or property. Most states require this, so check to see if this is offered and how much coverage comes with it.
Comprehensive Deductible/Coverage – This can also be called OTC coverage, or Other-Than-Collision coverage. This will cover things unrelated to a collision to your vehicle. For example, theft, natural disasters, or other non-driving-related events.
Collision Deductible/Coverage – This coverage applies when your vehicle is damaged from hitting another vehicle or object. The amount you are given after a claim has a lot to do with the value of the car. This is where you will want to see how much coverage you actually need depending on the value of your vehicle.
Uninsured Motorist Bodily Injury – If an uninsured driver hits you, this covers you and those in your vehicle if you are injured.
Uninsured Motorist Property Damage – This covers your vehicle if an uninsured driver hits you.
Gap Insurance – This insurance covers your vehicle when you first purchase it and drive it off the lot. For more information on that, check out this link here.
Getting a new vehicle is exciting, but be sure you are properly insured in the case of an accident. Here are some of our top tips to help you while shopping for auto insurance:
- Know that different states have different insurance requirements. You can do your own research online, or ask an insurance broker to find out what the requirements are for your state.
- Ask about a discount if you pay for 6 months at a time, or set up automatic payments. If you can afford to do this, and pay things upfront, it will usually save you in the long run.
- You can go through a broker, or work directly with a company. The benefits of working with a broker include having someone who is negotiating the price for you and comparing different quotes that fit what you need. They do receive a cut for their services, but it can be useful to have someone who is familiar with the state insurance requirements, while also being familiar with the best rates and discounts. Not to mention it can save you time, and you will often be reminded when it is time to renew.
- With that being said, do your research and compare quotes from a variety of companies, and pay attention to what they offer specifically. It may be an amazing quote, but be sure it is the coverage you are looking for, and the best fit for you and your family.
- Take into consideration how much your vehicle is worth. In some cases, an older vehicle that is only used around town, may not be worth a low deductible. Consult an insurance broker and other trusted insurance professionals to know what is best for you and your family.
- It can be more expensive to start insurance again if your insurance lapses, so try to stay on top of always having coverage.
Shopping for car insurance is something worth investing a bit of time into so you can find the best premium for the coverage you need. You don’t want to be thinking about it after you have been in some form of accident. Rather, do the research and notify your insurance company before purchasing your new vehicle if possible. Please feel free to ask us about gap insurance if you don’t have the chance to coordinate long term insurance before purchasing your vehicle.
Our best advice is to research a broad variety of companies or reach out to a broker that you can compare rates with to what you’ve found. As always, talk to an insurance professional to find what is best for you and your family.