Each car insurance company has a unique offering, but not every company can save you the most money. The best way to choose between companies is to know which factors will have the most influence over your car insurance rate.
Here are some important facts and tips to consider when purchasing car insurance for the first time:
Compare Different Companies for the Best Value- Although it may be tempting to buy from the first company that you get a quote from or have seen advertised on TV, it is important to compare several companies to find the lowest rate for you. Consider comparing the rates of at least four companies before making a purchase. A great way to do this is to go through a brokerage agency that can give you a quote for many companies at once. Another quick way to get several quotes quickly is to fill out quotes for companies that offer insurance online without having to talk to an agent. Purchase More Coverage than the State Minimum- The state sets a minimum coverage level requirement, but it is rarely enough to fully cover a major accident. Purchasing only the state minimum can cost you much more in the long run, than paying a few more dollars per month to get comprehensive coverage. For example, if your policy doesn’t cover car repairs for your vehicle or a vehicle that you cause damage to in an accident you could end up having to pay much more out of pocket for these expenses than you would have paid in monthly insurance payments.
Weigh Your Deductible Options – One car insurance company may offer you the lowest rate, but they may end up costing you much more in the end. For example, if once company offers you a policy for $35 per month, but the deductible is $1,000 each time you have an accident you would pay $1000 minimum out of pocket for each time you needed to file a claim with your company. If you had one accident that year you would pay $1,000 in addition to the $420 for total of $1,420.
For example, if the car insurance policy you choose costs $35 per month but the deductable if you have an accident is $1000 and you have one accident that year, the yearly cost for your insurance plus the accident would be $1,420. That breaks down to $1000 for the deductable for the accident, and $420 for your yearly insurance policy.
If another company offers you a policy for $50 per month with a $500 deductible and you had one accident that year, your yearly total would be $1,100 or $500 for the deductable for the accident and $600 for your yearly insurance policy. This is a good example of how a lower monthly payment doesn’t necessarily mean more savings overall.
Compare Your Additional Coverage Limits – Each policy has specific limits for additional coverage such as comprehensive/collision coverage, personal injury protection (PIP), Medical expense coverage, uninsured motorist coverage, bodily injury and property damage coverage on every car policy that you get a quote from. These types of coverage can save you lots of out of pocket expenses so it is important to decide if you want to pay more upfront or end up paying more in the long run. These limits will be listed on your policy summary. It is important to know that, just because you are getting the lowest rate each month, that doesn’t mean you’re really getting the best deal.