Auto Insurance Quotes

 

Studies in both the United States and the United Kingdom have shown that when shopping for auto insurance, going online to compare quotes can save you as much as 25% over what you'd pay otherwise. That's great news, but it's more helpful to also know what to look for. After all, all quotes are not equal.

 

When looking at an auto insurance quote, then, here are the items you must compare:

• Coverage Amount: What is the dollar amount for each type of coverage, as well as the total overall? There should be line items for liability, uninsured/underinsured motorist coverage, collision insurance, and comprehensive coverage, though the latter two are often optional if the vehicle being covered is not leased or financed.
• Coverage Period: When exactly does your coverage begin, and when does it end? Do you have automatic renewal, or do you have to do something active to continue your coverage every six months? These dates are especially important if you are changing insurance companies, as you'll need to know when to cancel your old policy.
• Deductible: This refers to the amount you'll be expected to pay out of pocket when you file a claim. Think of it as equivalent to the co-payment portion of medical insurance. This amount is inversely proportional to your premium.
• Premium: This is what you pay on a monthly, semi-annual, or annual basis, to keep your insurance enforced. If you miss a payment, you may be liable for a reinstatement fee, so be sure you plan for renewal dates. Many companies not only allow monthly payments, but give you a discount if you set up automatic, electronic payments.

 

Once you know what to compare, it's helpful to know a bit about how premiums are generated. There are three main components of any auto insurance quote, and these are added together and weighted, to come up with the premium that you pay. The components are the coverage, the deductible, and other factors such as discounts and your driving record.

• Coverage: More than just the minimum required liability and personal injury protection coverage for your state, this also includes your collision insurance, and comprehensive coverage which will pay to replace or repair your car in the event of theft, vandalism, or certain environmental issues. This is also where the number of drivers being associated with a specific car, and their ages and experience behind the wheel come into play. Coverage is affected by such things as finance or lease agreements, as cars that are not fully paid for generally have to carry more coverage than those which are fully-owned. In addition, if your lease agreement does not include gap insurance, or coverage for the difference between the value of your car and the amount of the lease, you'll need to add that to your package. Remember that if you own a home as well as a car you may require more than the minimum required coverage in order to protect that investment.
• Deductible: We compared this to the co-payment in medical insurance. This is the money you pay out of pocket when you file a claim. Deductibles, depending on the size of your premium, the value of your car, and other factors, can be as low as $250 or as high as $1000, or anywhere in between. Many people with clean driving records, who also garage their cars at night, elect to have a high deductible in exchange for lower premiums. Others prefer a more balanced approach.
• Other factors: This is a catch-all for "everything else that influences your insurance rates," and includes everything from your credit score, your zip code, and your age (men aged 25 and younger are still paying more for their insurance than any other class of driver, while those with poor credit are also penalized financially). Your driving record is examined, and can either save or cost money, depending on how clean it is, and there are numerous discounts and credits you can ask about, such as those for being a good student, mature driver, or loyal customer, or a member of certain professions or unions. You can also save money by bundling your home and auto insurance with the same insurance company.

 

Now that you know what to look for, and what affects the premium you pay, you should feel more confident about shopping for insurance. Remember that no two people, even if they're the same age and drive the same make and model car, will have the same insurance premium, and don't compare what you're paying to the premiums of your friends or relatives. Instead, compare different companies based on your particulars, and you will find affordable, reliable auto insurance.