Automobile insurance sits at an intersection of competing desires. Everyone has to pay for it, but wants to avoid using it. In the unfortunate case of an accident, people want to have great coverage, but they don’t want to pay an exorbitant amount every month. The ideal is great coverage for a low monthly payment. Given today’s competitive insurance market, this isn’t an impossible goal.
Value of Research
The Internet has made finding affordable automobile insurance rate much easier. Many sites offer insurance quotes, including the ability to compare rates from multiple insurers. The categories to compare include the deductible, liability, comprehensive, property damage coverage, coverage for uninsured and underinsured motorists and passengers, and exclusions. Make sure the comparisons use the same scale, i.e. that the comparison is apples-to-apples. Insurance companies are rated by A.M. Best and J.D. Power and Associates, so make sure to check on which companies have the best and worst customer satisfaction.
Discounts
Sometimes people can combine their home insurance policy with their automobile liability insurance policy and get lower affordable automobile insurance quotes through this combined policy. Homeowners may want to check with their home insurance companies to see if this is an option. AAA, as well as other organizations, may offer discount rates for members. If a buyer has multiple cars insured by the same company, he or she may be eligible for a discount. Also check to see if paying bills online reduces billing and processing fees; take advantage if this is an option. Companies may also have a “low-mileage” discount for those who don’t drive a lot. If a buyer is insuring teenagers, many companies offer a “good student” discount, which can help defray the significant premiums paid to insure young drivers.
Factors That Affect Insurance
There are a myriad of factors that affect how much people pay for car insurance. These include the type of car, one’s driving history, location, credit history, gender, age, the safety and anti-theft devices on the car, among many others. A buyer can’t help some of these factors, but others are within one’s control. Buyers should get copies of both their driving history and their credit history. Make sure all information is accurate and if not, correct the mistakes. Buyers can get free credit reports online and can order a driving record copy from the DMV. Since these factors do affect the cost of insurance, it’s worthwhile to make sure insurance companies have the correct information.
Amount of Coverage
Not all cars need the same amount of coverage. Older cars are good examples. Generally, a comprehensive/collision policy on an older car is not worthwhile if the value of the car is less than ten times the cost of the premium. People should also never assume the minimum required coverage is sufficient for their needs. Depending on the type of car – bigger cars have the potential to do more damage – an accident may exceed the policy’s limitation and then the cost may have to come out of pocket. Many experts suggest that drivers have at least $500,000 in liability coverage.
Deductibles and Premiums
Insurance deductibles are inversely related to insurance premiums. If a buyer can keep a higher deductible – meaning the amount the buyer has to pay in case of an accident – then the insurance premium – the monthly payment – will be lower. The reverse is also true. The balance between the two depends on each driver’s individual needs. If people are able to pay higher amounts in case of an accident, it may be worthwhile to get insurance with a lower monthly payment. But they should take care not to be underinsured. Underinsured drivers have insurance, but the insurance covers less than they need it to. If they get in an accident, they’ll likely have to pay quite a bit of money out of pocket. Buyers should take care not to put their financial solvency at risk when looking for affordable insurance.
