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Welcome to Car Insurance Answers!


With no shortage of funny—and corny—car insurance commercials on TV today, the options for cheap automobile insurance coverage seem endless and overwhelming. While it can be frustrating to sort through the thousands of different auto insurance companies, with a little effort you can find great deals on car insurance rates due to the intense competition between insurance companies. Thousands of companies offer free quotes and assistance to find you the cheapest auto insurance available. Best of all, most of it can be done on line. Most auto insurance companies also offer 24-hour live chat or customer service. As the commercials say, you can shop for auto insurance in your pajamas.







In most states, auto insurance is the only legally mandatory insurance in existence. This means that if you drive a car, van, motorcycle, or other mode of transportation, you are required by law to have minimum coverage. Penalties are severe should you be caught without adequate automobile insurance coverage. Some states require more stringent coverage than other states.

Besides legal consequences to driving uninsured (such as losing your license) there are also financial consequences to driving uninsured or underinsured. Costs associated with an accident can be extravagant if you don’t have a good insurance policy to share the burden with. Driving around with it can be risky.

Like all other insurance products, auto insurance is basically a contract or agreement between the insured (you) and the insurer (insurance company). Your commitment is that you will pay premiums to the insurance company, and in return, their commitment is a promise to pay claims as outlined in the policy. As with all insurance, you are never committed to anything other than your premium payment. This means you can cancel your policy at any time if you find a better auto insurance rate elsewhere. (Just make sure your new coverage is in place before you cancel your existing policy).

There are different parts of auto insurance and different states require different amounts of coverage to meet minimum requirements. When you apply for a car insurance rate, it will be up to you whether you want to have a bare bone policy or a more expensive policy. The option is yours, and the cost associated with your policy will directly reflect the out of pocket expenses and risk you are willing to take. Though some policies are more expensive than others, they may also provide you with greater coverage should you need it.

Before you start shopping for car insurance rates, here are the important parts of an auto insurance policy you need to be aware of. Knowing the differences in types of coverage will help you make an educated decision on which coverages you feel comfortable carrying.

Recent Car Insurance Questions


 

Liability Coverage


The first is liability coverage. This covers damage you cause to others—both bodily injury and property damage. For example, it may cover attorney fees, medical costs, lost wages, and repairs. It’s important to pay attention to your liability coverage amount. Each policy may vary in the liability limit. In essence, this means that if you were to be sued due to bodily injury or property damages, your insurance will only cover the maximum amount as outlined in your policy. It’s important to remember that liability coverage does not cover your own car. It is strictly coverage for others.

 

Collision and Comprehensive Coverage


Then there is collision coverage. This is coverage that pays for your own car and associated damages should you collide with another car or object. When repair is needed for your own car, this is the coverage that provides those benefits. After you pay any necessary deductible, the insurance company will pay the appropriate costs for repair under collision coverage. If your car is leased or financed, you may be required to have adequate collision coverage. However, as a general rule, if your car is older you may consider opting out of this type of coverage.

Comprehensive coverage differs from collision coverage in that it covers your automobile for accidents that occur without collision. For example, damage due to animals, fire, flooding, or theft. Once again, you are responsible for the deductible as an out of pocket expense.

 

Other types of coverage


But the options don’t stop there. There is also Uninsured Motorist coverage. This also covers both property and bodily injury liability damage.

You also need to pay attention as to whether or not your coverage provides for Personal Injury Protection, or PIP. This covers the policyholder, his or her family, passengers, and other authorized users. This coverage includes protection for medical, hospital and funeral expenses regardless of who was at fault.

 

Where to find cheap auto insurance


As if options regarding amounts and types of coverage weren’t enough, there are also an abundant amount of auto insurance companies from which to get auto quotes. Some options include Geico, State Farm, Progressive, Allstate and Esurance.

All of these companies offer online quotes, as well as customer service representatives should you prefer to talk to someone over the phone. Some even offer retail stores with live agents that can walk you through the process of choosing the best policy.

Working with a personal and local agent may or may not be more expensive than buying insurance online. If you are unfamiliar with what type of coverage you need, it may be beneficial to meet with an agent face to face and have them walk you through your coverage. Meetings and consultations are free, so take advantage of the time available and have someone explain your policy in detail. However, going direct for means the company doesn’t have to provide its agents with a hefty commission, being able to provide its customers with the cheapest car insurance possible.

Online sites such as Geico promise to get you a cheap car insurance quote in about 15 minutes or less. They also offer 24-hour telephone and Internet service.

 

Ways to keep auto insurance cheap


Everyone wants to lower his or her auto insurance. While there are some things that are out of your control in regards to the cost of insurance, here are a few tips and tricks you can use to keeping costs low.

First of all, try combining multiple lines of insurance. For example, many companies will offer discounts on your auto insurance if you also have your home, life, or boat insurance with the same company. If you have multiple companies providing you and your family insurance on various things, it may be advantageous to consider consolidating to one insurance company.

Insurance companies might also offer discounts for a safe driving history or for your kid’s good grades. Ask your agent about these types of discounts which include benefits for students, seniors, persons in the military, farmers, etc. Go online to various websites to see if you qualify for any special promotions or discounts.

If you are a member of certain business, social or professional organizations you might also qualify for auto discounts. Examples include AAA, AARP, fraternal organizations, alumni associations, credit union memberships, medical organizations and others.

In addition, as a general rule, the higher your deductible, the lower your premiums. If you are willing to take more risk by paying more out of pocket expenses should an accident occur, you will notice a drastic decrease in premium amounts. This is a major factor in your insurance rate. Decide if you feel comfortable bearing more of the risk on your own or if you prefer to share most of the burden through insurance coverage.

Drivers can also get discounts for reaching certain age barriers (such as age 25) and life events such as marriage or buying a home. If any of these have occurred, or if it’s been awhile since your last accident or speeding ticket, it might be time to get a new insurance rate quote to see if you can save money. Insurance companies offer quotes for free, so you’ve invested nothing but your time.

 

Insurance Companies Comparisons


As with any other consumer product, shopping around for car insurance comparisons can pay off big time. Websites such as Insurance.com and Progressive will compare policies to ensure you are getting the cheapest car insurance available. Be sure however that car insurance comparisons are being done on policies with equal amounts of coverage. Obviously, you will want to compare apples to apples to examine the true cost.

To compare apples to apples, make sure each policy you are comparing provides the same type and amount of coverages discussed earlier. There are also various ways to pay your policy premiums such as monthly, quarterly, annually, etc. Make sure you are comparing the same premium mode with each policy you compare.

Auto insurance companies have also started checking customer’s credit scores to determine if you qualify for coverage and if so, how much to charge for your premiums. Keeping a clean credit report may benefit you as you shop for the cheapest car insurance available. While many think this is unfair, insurance companies argue there is a statistical and direct correlation that justifies this.

The good news is that if you have improved your credit drastically since the last time your shopped for cheap auto insurance, it may be worth it to get new auto quotes.

 

What else effects my insurance rate?



Every insurance company has different ways of pricing insurance. Most of it is actually determined by insurance underwriters. Some of the cost depends on specifics around the business of the company itself (do they pay agents commissions, advertising costs, amount of claims the company pays out, etc). Some of the cost will depend on the driver, as we already discussed such as your credit score, driving history, age, & sex.

But there are other variables in regards to the cost of your auto insurance. For example, the type of car being insured. Obviously, the more expensive the vehicle, the more expensive the coverage to protect it. It is possible to get a rate on a car that you don’t yet own. If you are shopping for cars, it may be advantageous to get insurance quotes to see the effect that different makes and models would have on your auto insurance.

Locality of the insured is also important. Are you driving in a more urban setting or suburban areas? Because statistically there are greater risks involved with urban driving (such as theft and accidents) these drivers will usually pay more than suburban drivers. If you’ve recently moved to a more rural area, you may be paying too much for your car insurance.

Insurance companies also consider how much you drive. There is a greater risk associated with driving more often and further distances and these types of drivers are more expensive to insure.

While some of these things you are unable to control, others you may be able to. Rates can also increase and decrease over the years as mortality rates and life expectancy rates change nationally. It may be a good practice to get a new quote every couple of years, just to see if you are able to take advantage of any lower costs.

The most important thing to remember when shopping for cheap car insurance rates is to make sure you understand what your policy does and does not cover. Make sure you discuss with someone when you purchase the policy what your coverage includes. If you have questions, the time to ask is before you get in an accident. Companies have various ways, which allow you to research your insurance policy such as online, or via email or telephone call. Take advantage of the customer services the company offers.