Auto Insurance – Life in the fast lane can oftentimes seem like a game of Russian roulette. Fortunately, car insurance companies provide invaluable peace of mind while you are on the road. The vehicle of auto insurance offers financial security by covering losses resulting from motor vehicle accidents and protecting against potential liability arising from the latter.
They help pay the insured’s medical and repair bills, as well as other expenses related to traffic accidents. Nearly all fifty states require drivers to carry basic car insurance. Selecting an automobile insurance company can be challenging, in light of the substantial number of carriers in the marketplace.
By equipping themselves with information and performing a little research and investigation, consumers will find the optimal car insurance company with an affordable policy that serves their needs.
Auto insurance companies vary in the service, coverage, and rates that they offer. Drivers should select the coverage level that best matches their personal circumstances. Basic car insurance policies, according to the Insurance Information Institute (III), consist of the following six standard types of coverage:
- Bodily injury liability;
- Property damage liability;
- Personal injury protection (PIP) or medical payments; and
- Uninsured/underinsured motorists coverage.
Some of these coverage areas are mandated by state law, while others are deemed optional. Liability auto insurance coverage, which is comprised of both property damage and bodily injury protection, is a fundamental component of most car insurance policies and is a requirement in most states.
Collision insurance is generally the most costly coverage. Consumers may also purchase additional auto insurance coverage, such as
1, Coverage for labor and towing charges;
2, Rental reimbursement; and
3, Gap coverage, which pays for the difference between the amount due to the vehicle-leasing company and the vehicle’s actual value at the time of the loss.
It is not uncommon to pay a lower premium and to save hundreds of dollars with one car insurance carrier than with another offering the same coverage.
A number of states’ departments of insurance offer guides that indicate what different car insurance companies charge for different policies in different parts of the state.
Since car insurance rates vary from one company to the next, consumers greatly benefit from shopping around for low-cost insurance. It is recommended that prospective policyholders obtain quotes from at least two auto insurers by either visiting the agency, contacting an agent over the phone, or by consulting the internet.
A myriad of websites offer insurance quotes for the fifty states and enable consumers to compare premiums and plans from the most reputable companies.
Online comparison-shopping is not only convenient but also profitable since consumers may save more than 25% on their car insurance rates. When comparing insurance quotes from different providers, shoppers should ensure that they provide equivalent coverage.
Consumers should inquire as to any discount programs available at different auto insurance companies. To lower their insurance premium, shoppers should find the car insurance company that offers the most attractive discounts for their personal situation. Typically, consumers may avail themselves of numerous discounts, including the following:
- Long-term policyholder
- Completion of a defensive driving course
- Anti-theft and safety (i.e. anti-lock brakes, airbags) features
- Senior citizen driver
- Students with good grades
- Car pooler
- Low mileage
- Safe driver
- Driver whose profession is mathematics, science, engineering, or teaching
Multi-line discount for purchasing different policies (i.e. auto and homeowners) from or insuring multiple cars with the same carrier (for savings up 10%)
Car insurance rates are computed on the basis of a variety of factors including:
- Price and type of vehicle;
- Driver’s credit history
- Amount of deductible/Coverage selected
- Driver’s age, driving record, and gender
- Location (rural, urban)
- Usage of the vehicle (commute to work, annual mileage)
Consumers should only purchase auto insurance coverage from carriers that are licensed in their state. They may contact their state’s department of insurance to obtain a listing of providers licensed in the state.
To investigate reliability, prospective policyholders should also research the different car insurance companies’ industry ratings. A number of services, which may be accessed online, rate auto insurance companies according to such criteria as price, handling of claims, choices of coverage, and customers’ satisfaction with the carriers’ agents.
There are also independent rating agencies that publish the financial health ratings (i.e. ability to pay claims) of car insurance companies. Consumers should select a reputable, financially stable provider with a long track record.
Finally, future policyholders should focus their search on auto insurers that offer quality customer service and that are diligent and competent at handling their claims expeditiously, efficiently, and equitably.