How To Choose The Best Auto Insurance

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Finding a car insurance company that is right for you can be confusing. There are many different options for you to choose from, and making the right decision may not be as easy as you once thought.

Figuring out what type of insurance to have, as well as, how much coverage is right for you, are two topics that should be examined very carefully. Although there are many ways to go about choosing the auto insurance company that will work in your best interest, there are a few specific areas that you want to focus on. Here are some key topics that are important to consider when choosing car and auto insurance.

1. What types of insurance does the auto insurance company offer?

There are several types of car insurance to consider:

Liability Insurance: This can be broken down into bodily injury liability (protection in case someone suffers physical injury in an accident), and property damage liability (protection for if you cause damage to some one's property).

Liability insurance is extremely helpful if you live in an area where the property value is extremely high, or the damage to some one's job performance or career could be greatly hampered due to bodily injury. 

Collision: This type of coverage covers you if you are involved in a collision. Remember,  while property damage liability insurance typically does not carry a deductible with it, in most cases collision coverage usually does carry a deductible. Check with the insurance representative to find out if there is a deductible, and how much.

Comprehensive: This covers the non-collision type damage that happens to your car (ex: damage to your windshield due to a hail storm). If you live in an area with a strong winds, or where hail / ice storms are prevalent, you may want to consider having comprehensive coverage. 

Uninsured / Under insured motorist coverage: This covers you when either the other person does not have insurance, or if the insurance coverage isn't enough to cover the damages. Some states only allow for bodily damage while others also include property damage with this type of coverage. When speaking with an insurance representative to compare rates, and coverage, ask specific questions about what is covered if you obtained this type of insurance, and how much is covered. 

 If you live in an area where the cars tend to be over $25,000 then collision coverage would be a good idea. Also, if the areas you tend to drive in have lots of structures that are expensive to replace, or if you travel across the country a lot, then you may want to consider property damage coverage.

Really think about how often you drive, and where you drive in order to get a good idea of what things you want in your coverage. If you have an older model car, collision coverage may not be needed, especially if you are a pretty safe driver.

2. Does the car insurance company offer special discounts for safe drivers?

Many companies now offer a "safe driver" rate, or discount if you have not been in an accident within the last 1 to 2 years. Some even offer "accident forgiveness" where your rates will not increase for the first accident that you are involved in within a calender year.

Double check to stipulations of the offer if the auto insurance company that you are investigating does offer it. Sometimes, the accident forgiveness does not imply if you were at fault due to a DWI (Driving While Intoxicated). Make sure you understand the fine print before assuming that the "accident forgiveness" clause applies to all accidents.

3. Is the car insurance company going to be reachable when you really need them?

More, and more companies are now offering 24 hour claim service, HOWEVER, many still keep normal business hours if you need to check on the status of your claim. Make sure you know what the hours for contact are, and what types of customer service representatives will be available when you call.

Often times, the customer service department that handles filing a claim is totally separate from the ones that help you find out the status of your claim. Be sure to ask these questions up front, and get the name of the person that relayed the answers to your questions. This can make a big difference if you are ever involved in an accident. 

4. Is the claim process for the auto insurance company complicated?

Most companies prefer to have an inspector come out to assess the damage, or have you bring your vehicle in to one of their locations. If you are using an online insurance company, be sure you understand the full steps to filing a claim.

Online insurance companies are a great way to save money, however, you do lose something in the "personal touch" - especially when it's time to file a claim. Make sure you completely understand how to file a claim, and have a list of questions that you want to have covered as you prepare to speak to the prospective insurance company. 

5. Will the car insurance company give you their policies, and discounts in writing?

Many have taken this piece of advice for granted, and lived to regret it. It does you no good in a court of law to state that you were told that certain things would be covered in an automobile accident if you don't have those points outlined in a written document.

You can have the written policy points mailed to you or faxed over. Email is a possibility to, but make sure they email you an official document in a .pdf format, if possible. Again, a mailed or faxed document would be the better way to go.

Although there are other factors you can consider, these are the main ones to focus on. The main thing is do your research, and get it in writing. It will not do you any good if the insurance sales person makes some special offers to you over the phone, but you never get those special features in writing.

Before contacting a prospective auto insurance company, have a list of different cars that you are interested in before you purchase your vehicle. Understanding ahead of time what type of coverage you can get for different vehicles may help you make a smarter decision as to what vehicle you will ultimately purchase.

Another thing to consider is deductible versus premium. If you are a willing to go with a higher deductible, then you can drastically save on your premium. Word of caution here. Be sure to set aside funds for if you ever are in an accident where you would need to pay the deductible.

If you are not the kind of person who can set aside funds for automotive needs, and not spend them, then you may want to go with the lower deductible - higher premium.

There have been many horror stories over the years where people thought they were covered for a particular situation when, in fact, they were not. Give yourself ample time to shop around to get the best price, and also the best coverage. For more information, check out the links below.

Resource Links:

Basic Types of Auto Insurance

National Association of Insurance Commisioners

Top 10 Ways To Lower Your Car Insurance Bill

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