How to Shop for Car Insurance: A step-by-step guide

How to Shop for Car Insurance: A step-by-step guide

Having more options when buying something is a benefit for the customer, but it comes with its own set of confusion. Which car insurance policy is more important, which one should you get and which ones to avoid? All these questions can make your insurance purchase experience a headache.

However, there are a few steps that you can take to help you make the right choice without the hassle. You need to be informed about the ins and outs of auto insurance policies, their coverage, the coverage limits, etc to make a smart choice that saves you money as well.

From understanding different insurance policies like liability insurance, personal injury protection plan, collision coverage, etc to finding out what deductibles are and how to save money using a few proven tips, this article will show you how to shop for car insurance in a step-by-step process.

We’ll cover all the things, right from the simplest to the most complex ones. Make sure you follow all these steps (and tips) to get the maximum benefits while getting suitable auto insurance coverage for yourself. Let’s get started.

Things You Need for Auto Insurance

  • Drivers license
  • Name and address of the policyholder
  • Vehicle Identification Number
  • Previous auto insurance policy details
  • Other personal details specific to the insurance company

Compare Insurance Plans

There are some places or things that we have no idea about the baseline. For example, you might understand why a pickup truck is expensive because you are well aware of the features, the power, and the price of a baseline model. There are dozens of other options you can compare the pickup truck with. This comparison gives you an advantage.

The same is true for auto insurance policies. Without comparing, you are almost bound to make the wrong choice. Wrong here means that getting a car insurance policy that either lacks coverage or is overpriced. Compare to get the best rates and coverage.

Get quotes from all the major car insurance companies in your state and compare their coverage options, claim process time, customer service quality, and most importantly, their price. With every option laid out in front of you, making the right choice becomes much easier.

For example, if you live in California, look for minimum California car insurance coverage rates and take a look at how low the prices of auto insurance policies can go. This helps you create a baseline for your comparisons. Then select the best policies available with the best coverage options.

Know Thy Coverage

It would be a sin to look for car insurance policies without knowing what these policies cover. This could lead to you getting policies you might not need, or skipping crucial policies. So here’s a brief refresher about all the different auto insurance policies available and what they cover.

Liability Insurance

Liability insurance protects you from a financial accident if you get in a car accident and you are at fault. When you are the reason for the accident, the cost of the medical treatments and property repairs shall be paid by you. You are legally bound to pay for the other driver involved in the accident.

Liability insurance pays for just that so that you don’t have to spend a fortune on hospital and repair bills. You are required to have a liability insurance policy in almost every state, and driving without one can get you in legal trouble. So make sure to add this policy to the cart.

Personal Injury Protection Plan

Car accidents can lead to injuries, even serious ones. A personal injury protection plan pays for the cost of medical treatments and hospitalizations costs needed after a car accident. A personal injury protection plan is required in 12 states, called the “No-Fault” states, to legally drive a car.

You might be thinking what makes personal injury protection different from MedPay? While both cover the cost of medical treatments after a car accident, where PIP stands out is that it also covers lost wages for all the days you can’t work or operate your business due to the treatment.

Uninsured Motorist Coverage

UM policy is claimable when the driver at fault lacks liability insurance, or if the driver at fault is absent from the accident (hit-and-run). There are over 32 million uninsured drivers in the US, making UM policy necessary.

Collision Damage Waiver

Collision insurance covers the cost of car repairs for your car if it gets in any form of a collision accident. Whether you drive your car into another car or vice versa, drive into a tree or a wall, no matter what you drive into, collision coverage will reimburse you for the damages.

Comprehensive Coverage

Any damage to your car, while it is parked, is usually covered under comprehensive insurance. These damages include damages due to riots, projectiles, vandalism, animals, and natural disasters such as hailstorms, hurricanes, fires, earthquakes, etc. You can also get your car’s actual cash value (the current market value) back by claiming comprehensive coverage in case of theft.

Deductibles

A deductible is an amount that you pay before your insurer pays the rest of the coverage amount. Deductibles are used to prevent the abuse of insurance policies. The policyholder gets to decide how much deductible they want to set.

Higher deductibles reduce the insurance premium rates, but you’ll end up paying more from your pocket in case of a car accident. Lower deductibles will increase your insurance premium rates, but if you get in an accident, you get to pay less. So set your deductible limit wisely with all of these things in mind.

Coverage Limits

There’s a specific coverage limit for every state and your insurance policy (mostly liability insurance, personal injury protection plan, and uninsured motorist coverage) is required to have a coverage limit either equal to or greater than the state’s minimum limits.

Ensure that your policy’s coverage limit is always higher than the state’s minimum coverage limits. This prevents you from being underinsured and paying the extra amount from your pockets if the cost of the accident exceeds the coverage limit.