Auto Insurance Policy, Coverage and Cost Disparities – What You Must Know Before Buying

There may be vast differences between auto insurance quotes and the current market for auto insurance policies. You can quickly search your preferred search engine for “auto” or “insurance”, and you will see a variety of coverages, rates and options. There are literally countless options available to choose from, so how do you select the best policy for you?

Remember what you’re buying: pure and simple risk coverage. This coverage should cover any damages, injuries, medical costs, or loss of life for which you may be held liable. This sounds pretty serious doesn’t you think? It is. It is important to protect your vehicle against all possible risks. They include not only financial resources but also goodwill and customer service. A customer service team that is efficient, professional, and friendly can help avoid many unpleasant complications. Good relationships between insurance companies and the auto insurers can greatly assist in the handling of your claim or that of the injured party. A win for all parties is when a lawsuit is avoided. Risk coverage is the main consideration. All other factors, including cost, are secondary. However, regardless of the selection process used, these are the key factors to remember:

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1. Do not self-insure. If your vehicle is $2500, and your Collision insurance (which covers the cost to repair YOUR car) costs $3000 a year, it should be clear that you can self insure total loss of vehicle. This will allow you to make a profit. It should be clear that every automobile, no matter its cost, can inflict approximately the same amount property damage, bodily injuries, or death. These Liability coverages are essential for everyone, except the super-rich and the poor. You can customize your policy to suit your risk tolerance and the premiums you are willing to pay. You can save the most on your premium by specifying a coverage deductible. While these savings are not free, you will be taking on the risk of having to pay for the deductible in the event of an accident. In exchange, your premium will be lower.

2. Reputable insurance companies are the best. These companies:

  • Are generally corporations in your country and hold corporate assets.
    • You are authorized to conduct business in your state
    • Comparable favorably with their peers in A.M. Best Ratings for qualities such as:
      • financial stability;
      • Customer service;
      • claims handling.
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3. You can get the coverage that you need at the lowest price. This may seem like an interminable process but it can be limited to getting an auto insurance quote at reputable insurance companies. Three quotes are sufficient, but you should get more than one to get the right coverage. If there are six top-rated companies, get six quotes to help narrow down your search. Because no two businesses have the exact same customer base, workforce or business, there is no way to predict future premiums based on the same cost history. Companies must compete with each other in the market. However, there are many considerations such as whether a company made or lost money, consumed or accumulated reserve funds, added or lost policyholders, and so on. Multiple rate quotes may be necessary. Although many have experienced significant savings by purchasing their auto insurance online, it’s important to make sure you get your insurance from an established company. This is where you are purchasing risk coverage. Do not buy without checking the rating for your potential risk coverage partner.

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4. Do not lie during the application process. This will invalidate your coverage. An insurance company will give you a quote based on a variety of factors about you and your driving habits. This includes your driving record, age, sex and marital status. It also includes vehicle use (business/pleasure) as well as make, year, engine/hp, number operators, and number of vehicles. Your insurance company has access to your driving record. The majority, if you don’t provide all, of these rating factors can be found on your driving record. You are probably not best to provide this information with less than perfect candor. Most insurance companies are trustworthy and will verify the information that you give. The risk partners you choose are those that do not validate your information. Unknowingly, companies can correct (raise) their rates or cancel their policy. Remember that you are purchasing risk coverage. After you’ve been involved in a legal dispute or suffered an accident, you don’t want your risk coverage partner to drop you. Although this is unlikely, it could happen. If you were an insurance company and you were sued for millions of dollars in damages due to a policyholder who materially misrepresented the facts on which your risk coverage contract was built, would you be able to cancel the policy? This is enough.

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5. Take into account the limited scope of membership and group-affiliated policies. Rates for such policies may be significantly lower than the rates available to the general population due to the small risk pool they cover. This policy is designed to target the lowest risk group and will invariably increase rates for all motorists. Low-risk policyholders will be removed from the general risk pool, which means that the rates are higher for everyone else. These policies or companies may be available to you if your situation calls for it. Make sure to compare their rates with other quotes. The USAA (for US military personnel, retirees and spouses as well as their children), GEICO (for government workers) and many major insurers that are affiliated with professional and fraternal organizations offer highly beneficial policies to preferred risk drivers.

6. Consider “bundling”, if you are looking for insurance coverage. Some insurers offer discounts, favorable payment plans, or improved coverage for such things as multiple vehicles, multiple drivers, homeowners insurance, renters insurance, and life insurance policies purchased by the same policy holder. Get quotes.

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7. Profit from all your positive rating factors for policy. These are eligible for reduced rates for: Good Students; Anti theft Car Alarms; Antiskid Braking Systems; LoJack and similar systems; Electronic Stability protection; Multiple Vehicles. Multiple Drivers.

It is time to shop With the foregoing factors in mind, you are now ready to quote-shop, via the internet. sites and similar ones are great starting points for getting multiple quotes or detailed information about policies and coverages via the internet. Geico, Allstate and Hartford, State Farm. Liberty Mutual. USAA. INA. Nationwide. Travelers. These are just a few of the large companies that have an online presence. Multiple quote sites have the advantage that you only need to fill out one application form, which is as comprehensive as it is necessary for an accurate quotation. This drastically reduces the time and effort required to get the process started. Once you have some basic quotes, the company-specific sites will be easy to navigate. Keep in mind that you are looking for “apples-to apples” quotes from well-rated, reputable insurers. The internet will save you from the common automated call menus, waiting on hold to speak to an agent, and driving half the distance to obtain rates. You’ll then have to repeat the process until you feel satisfied or exhausted. It’s much easier to find the best, most reputable insurers. Just click on one or more multiple-quote sites, then fill out the data. Keep a copy of your input data for future reference. Then, compare the features and costs of the top insurances and make your choice.

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A Last Warning We cautioned earlier concerning the absolute necessity of dealing with an insurance company that is reputable and well-rated among its peers. The internet can help you save substantially on your premiums, but it also exposes you to unscrupulous insurance companies that may not pay claims, stall, or worse, and offer coverage at premiums far lower than most quotes. Even though you may be able to save money by purchasing from smaller companies, the experience of one claim with one these insurers will make it clear that it is worth investing in a reliable, high-rated insurer. Unrealized savings and unpaid claims will relieve you of premium dollars, but you are still at risk for any damages that the insurer escapes, evades, or avoids. It is better to reduce your premium by using the various methods described here than to sacrifice the quality of the company taking on your risk. All auto insurance policies and all companies are not the same, as the headline suggests. We have tried to explain the concept, but one more time seems appropriate: purchase from a reputable and highly-rated insurance company, reduce your premiums by the many means provided herein, and then sleep well, knowing that your risk-partner is there for you!