8 Tips For Buying Car Insurance

By Kenda - March, 19th 2013

According to insurance averages, a person will file a car collision claim once every 17.9 years. That means someone who received their driver’s license at the age of 16 is likely to experience their first auto accident by the time they are 34. Most people will have 3 – 4 accidents in their lifetime. In 2010 the average collision claim was over $23,000. Now, imagine paying that out of pocket. Because of that, auto insurance is mandatory in most states. Unfortunately, even the costs of insurance can sometimes be a burden. Here are 8 tips for buying car insurance that will help you get the most protection for your money.

1.  Compare Policies and Providers – There is no base rate for car insurance so it’s important to get quotes from multiple providers. Know what you’re looking for, how much you can afford and what your state minimum requirements are before you speak with providers. Some companies may even lower their fees if you can show them that another company made a lower offer.
2. Know The Levels of Coverage – Everyone knows they need car insurance, but many aren’t aware of how much coverage to buy. Coverage types include: bodily injury liability, property damage liability, medical payments, uninsured motorist protection, collision coverage, comprehensive and more.
3. Learn What Affects Your Premium – There is such a thing as cheap car insurance, but there are different ways your personal situation can raise the base price. Driving a sports car, SUV or even a vehicle that is a certain color like red or yellow can increase your insurance costs. The price of your vehicle and the frequency at which that make/model is stolen also pay a big part in pricing. Who you are is also significant. Your gender, age and past driving record will play a large part in your final costs. Your location is also taken into consideration; an urban area has a higher risk of collision than a rural area with less traffic.
4. Go For a Higher Deductible – It’s tempting to go with a low deductible because you want to pay out less if you’re in a collision. But, if you can afford smaller repairs without a claim, it will actually save you money on your payments over time to go with a higher deductible in the $1000 range.
5. Get Uninsured Motorist Coverage – Unfortunately, when you are in a collision, you have no control over how much coverage the other person has. Sometimes the person who hits you may not have insurance at all.  “The amount of uninsured/underinsured motorist coverage you carry should match your auto policy’s primary liability limits–meaning the maximum amount your insurer will pay the other guy if you cause an accident.” [Forbes]
6. Combine Your Insurance Policies – Most mainstream insurance providers offer several types of insurance. Typically, bundling things like home owner’s, auto and boat etc can provide you with a discount of 10% or more yearly.
7. Shop Online – Thanks to the reach of the internet and online payment systems, you don’t have to go with a provider close to home. Both large and small insurance companies now offer their services online and will also provide a free basic quote with minimal information up front.
8. Don’t Base Your Choice Just On Price – While cost is a main motivation when choosing an insurance provider, it’s not the only thing to consider. If you are switching policies or providers – compare the terms and conditions with your previous insurance to make sure you’re getting the same system you’ve been use to. It’s also a good idea to check online complaints and consumer reports filed against the providers. Do they have a quick response time? How often have they denied claims? These factors will take precedence if you find yourself filing a claim.