Finding the best car insurance is an important step for drivers looking to get on the road. Most drivers who own or lease a car are required to carry car insurance. New Hampshire and Virginia are the only states that do not require its resident drivers to carry insurance.
With an average of 6 million car accidents per year in the United States, car insurance provides peace of mind for many drivers. After all, the National Highway Safety Traffic Administration estimates car accidents in the U.S. cost almost $900 billion per year.
Because it can be a costly necessity, it is worth spending the time to find the best car insurance for your needs and budget. In fact, there are more than 500 U.S. car insurance providers, so the options are plentiful.
Let’s start off by distinguishing between no-fault states and all others. In no-fault states, the driver’s insurance covers their own accident-related medical bills and property damage and not that of the other party. However, these states require drivers to carry Personal Injury Protection (PIP) insurance, which we define below.
Finding the right car insurance requires, at the minimum, a basic knowledge of how it works. Here are the components of car insurance and a brief definition of each:
Additional options car insurance companies will offer include reimbursements for roadside assistance, rental cars (while your car is being repaired or replaced), and rideshares/taxis. Some insurance companies will offer GAP insurance or additional coverage for after-market accessories that were added to your car before the accident.
To find the best car insurance, you will need to decide on the coverage levels for these components. Also, you will need to consider any additional options that meet your needs and risk levels.
It is also important to understand deductibles. The amount you, as an insured driver, are responsible for paying before your insurance carrier will pay any claims. The higher the deductible specified in your policy, the lower your premiums will be.
So, where do you begin?
Well, there are specific coverage requirements and it differs for each state.
If you aren’t sure what coverage level is right for you, start at the minimum coverage requirements in your state. Raising coverage levels from there will increase your insurance premiums.
For example, in Wisconsin, insurance carriers may express state requirements for liability coverage as follows: 25/50/10. This represents $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident, and $10,000 in property liability per accident.
Wisconsin drivers are also required to have $25,000 in uninsured motorist coverage per person and $50,000 per accident.
They can increase their coverage on any of these components at the cost of higher premiums. The more risk-averse a driver is, the more likely they would be to increase their coverage levels.
After learning your state’s minimum requirements, figuring out your risk level, and understanding what you can afford, you will be better equipped to find the best car insurance for you.
Your driving record will affect the quotes you receive from insurance carriers. The more moving violations appearing on your driving record, the more it will cost you for coverage.
You may have difficulty recalling how many violations you have had or when they occurred. If this is the case, you can contact your state’s motor vehicle administration to obtain your official driving record for a nominal fee.
Also, research how long violations stay on your driving record in your state. If you have moving violations that may be expiring from your driving record soon, consider waiting to request quotes.
Besides the premium, identify what is important to you as it relates to car insurance. For example, claims processing time, local agent availability, overall customer service, payment processing procedures, and how they deal with non-claims issues may play a factor in your final decision. Be sure to have this list handy when contacting the insurance companies on your list. This will help you ask the right questions.
Make sure the different insurance quotes are based on the same information. This includes your driving history, vehicle information, and liability and deductible levels.
If you label yourself as a safe driver, consider higher deductibles. When requesting quotes, ask for them at various deductible levels. Compare these quotes within the same insurance carrier and across different ones as well.
As a side note, your credit score will affect your quoted premiums. This is the case in all states except California, Hawaii, and Massachusetts. The impact of your credit score on your premiums differs from one insurance carrier to another.
Be prepared to contact multiple insurance carriers to request quotes. Having several options will help you more accurately find the best car insurance for you. However, be wary of having too many options. Selecting from an overabundance of choices can become time-consuming and paralyzing. It may end up making your decision even more difficult.
When trying to determine which companies to contact for quotes, include a mix of regional and national carriers. There are advantages and disadvantages to both types of insurance companies. Whether you should go with one type or the other will ultimately be determined by your unique situation and what is important to you.
The types and levels of discounts offered vary across car insurance carriers. According to Insurance.com, discounts can be categorized into seven groups. The following is a list of types and examples for each group.
Request an exhaustive list of available discounts from each insurance company. Determine which you are eligible for so they can be factored into your quotes. Some insurance companies will only factor in discounts if you ask them to do so.
Car insurance rate comparison sites can be a helpful starting place for some. However, final decisions shouldn’t be based on the results from these sites alone. There are a few limitations to these comparison sites:
After you’ve narrowed down your list of insurance carriers, there is another step to verify they are worthy of your consideration. Other people’s experiences with a car insurance carrier can be strong indicators of what your experience will be like.
First, ask your friends and family if they’ve had experiences with any of the companies on your shortlist. Because they are a trustworthy group of people and have your best interest in mind, you can rely on them for honest feedback.
It is also important to receive input from other sources. Unbiased reviews are the most helpful, so don’t rely on testimonials found on the car insurance companies’ websites. Look for third-party review sources such as JD Power and Consumer Reports. These companies will give you a detailed review of many insurance carriers that may be on your list.
It is also important to check the Better Business Bureau (BBB) site to see if the insurance carrier has any complaints or disputes filed against it. The BBB gives each business in its database an overall rating if they have sufficient information to do so.
When trying to find the best car insurance, it’s important to not base your final decision on price alone. Thoroughly evaluate the options available with each car insurance carrier and compare it with the things that are most important to you. Finding the best car insurance for you is not only about finding the cheapest premiums.