UPDATED: Mar 13, 2020
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When looking for the best prices on auto insurance policies, you usually do not go with the first one you are quoted. You will likely take your time and browse through multiple insurance company websites to find quotes that are cheaper than what you first saw. You may take into account the pricing, the quality of coverage, and the customer reviews to decide which option will give you the best coverage for the best price.
Although this may sound like a relatively straightforward process, shopping for cheap car insurance can be much more complicated than that when you start to look at deductibles, coverage, premium costs, and seemingly countless other factors. You also might begin to think about the possible rebates available, terms and conditions that apply, and other details that could affect your quality of coverage and your cost.
Because auto insurance is a monthly payment that you will need to pay throughout the year for continuous coverage, it is especially important to get the lowest rate possible so that you are not putting yourself in a bad financial position. Going with a company that offers great coverage, but for a high price, may hurt your wallet each month and could end up causing you more problems than it’s worth, especially if you have extra coverage that you do not need. At the same time, signing up with the cheapest insurer may also prove to be unwise when it comes time to make a claim and they disappear.
To be safe, you should know precisely what you are looking for in a policy. You do not want to overspend on coverage that is not necessary. You also do not want to be underinsured or insured by a shady company when you need them to pay a claim. Continue reading below to learn more about auto insurance and how to find the best deal on coverage.
Understanding Auto Insurance Coverage
When learning about auto insurance coverage, you must first understand what you are looking at. What type of package is being offered, and what each service means to you, will help you decide which policy you need. Learning the basics will ensure that you get all the coverage that you deem necessary without having to pay for things that you don’t need. You don’t want to end up with an expensive policy that covers events that you will likely never deal with.
To get you started, here is a list of the basic auto insurance coverage types:
- Liability Coverage – This type of coverage pays the cost for property damage done or bodily harm to others caused by an accident. This kind of insurance also insures against legal and court fees as a precaution. Liability coverage typically has a minimum amount that is required by the state, and that can vary depending on where you live.
- Collision Coverage – If your car is in a collision with an object or another vehicle, this coverage will pay for the damages done to your vehicle so that it doesn’t come out of your pocket.
- Comprehensive Coverage – This kind of insurance will pay out the money to fix your car in the event of non-collision damage. This covers damage that is done by natural disasters, arson, theft, vandalism, etc.
- Personal Injury Protection (PIP) Coverage – PIP covers the medical expenses of its insured in the event of injury from a collision. This is paid even if the driver is at fault. PIP is required as a part of minimum auto insurance policies in some states.
- Uninsured Motorist Coverage – This type of coverage allows you to be paid for damages and injury costs when an uninsured driver hits you without liability insurance. This ensures that you will not have to pay out of pocket if someone without insurance hits your car.
- Underinsured Motorist Coverage – Similar to uninsured motorist coverage, this allows you to be paid when the other party doesn’t have the insurance needed to cover the full cost of the repair of the vehicle. This works to pay the gap between what they will cover and what they will not.
- Medical Payments Coverage – This coverage will cover the costs of medical expenses when you are in a collision, whether or not you are at fault. It’s very similar to PIP coverage, but there are still a few differences.
- Rental Reimbursement Coverage – This will pay for a rental car if you are left without a vehicle while your car is in the repair shop after an accident.
Knowing about the different types of coverage, you can now narrow down the list of what types you will need. This will help you get everything you need in an insurance policy to cover any unfortunate event. There are some on this list that you will likely check off right away, like rental reimbursement – if you don’t need rental vehicles – which will only add to your costs unnecessarily. Other coverage will be an obvious necessity to you, and knowing what you need will allow you to find what type of policy you should get.
You must also take into account what types of coverage are required of you in the state you live in. Some states may require you to purchase more insurance coverage than others, and some may only require liability coverage. It all depends on where you live. While most insurance companies will refuse to sell you coverage that is less than your state’s legal requirements, it is still important to know what coverage is required of you so that you do not get caught driving without enough coverage.
Looking Around for the Best Deals
Once you’ve settled on the amount of coverage you need and the coverage types you need, you can start searching around for a policy that meets your requirements. The quickest way to get coverage is to go to an insurance company’s website and get a quote directly from them. A better idea, however, is to go to a quote aggregator website to compare quotes from multiple insurance companies on a single site. By doing this, you can find coverage you need at the best possible price.
Be wary of the quotes you see online, however, as they are not always accurate. You might find that your cheapest option for coverage comes with a bunch of hidden fees once it comes time to sign up. Therefore, you must research all of your options thoroughly before you blindly sign up for coverage with a company.
One excellent way to avoid picking a disreputable company is first to read customer reviews of the insurers you are considering. If you see many negative reviews or customers complaining about claim settlements or the claims process, it’s best to steer clear of said company. Be sure to check out JD Power’s annual rankings to see which companies score best on claim satisfaction. Also, check out AM Best’s rankings to see which companies are the most financially secure.
Many insurance companies may entice you with extremely low prices or high sign-up discounts, but end up being more trouble than they’re worth down the line. This is why you should be wary of cheap insurance companies with negative reviews. On the other hand, if a company is reputable and treats its customers right, then the positive reviews will reflect that. Reading several reviews on each company allows you to see what the company is known for and will enable you to decide whether or not you want to give your money to that business.
Final Word on Finding the Lowest Priced Auto Insurance
With all this being said, the most important thing when searching for car insurance rates is to know what you need. If you know exactly what you’re looking for, then you will not be duped by insurance sales personnel trying to upsell you on expensive coverage options, and you will be able to get the coverage you need, for a great price. To begin your search for the right insurance coverage, enter your zip code above to start comparing quotes from reputable companies in your local area.