Most people get excited as soon as they hear the word "shopping." But when you put the words "shopping" and "car insurance" together, as in "shopping for car insurance," the effect is the opposite. When you think about shopping for car insurance, your eyes glaze over and your heart rate slows down to that of a couch potato.
Who are you? Indeed. Doug Heller, an insurance expert and consumer advocate at the Foundation for Consumer Rights, to...
Most people get excited as soon as they hear the word "shopping." But when you put the words "shopping" and "car insurance" together, as in "shopping for car insurance," the effect is the opposite. When you think about shopping for car insurance, your eyes glaze over and your heart rate slows down to that of a couch potato.
Who are you? Indeed. Doug Heller, a consumer advocate at the Foundation for Consumer Rights and a well-known expert on insurance issues, told us that "people buy insurance by calling the number on the screen" too often.
But hold on, this is very important! If you get into an accident, you want to be well taken care of. And you don't want to pay more than you should for car insurance. Maybe it's not the best idea to wait for a solution to be beamed into your living room.
How can you keep your eyes open as you try to make sense of this murky subject? Just remember that you can save money. How much? Each year, hundreds or even thousands. One of the authors, for example, put all of his insurance information into a service that compares insurance. The quotes ranged from $1,006 to $1,807 for very basic coverage on two old cars, which is a difference of $801 a year. If you're paying thousands of dollars to your insurance company because of a few tickets, an accident, or a questionable credit score, it may be worth your time to compare your policy to others.
Think about it this way: with the money you save, you can buy something you've wanted for a long time. Don't forget that goal. Now, let's begin.
You have to know what you need before you can go shopping. Find the right auto insurance for you by figuring out how much coverage you need first. This is different in each country. So take a moment to find out what kind of coverage is required where you live. Make a list of the different kinds of coverage and then go back to the next step.
Now that you know what is needed, you can figure out what else, if anything, you need. Some people are quite cautious. They live their lives based on what could go wrong. These people are a dream for insurance companies. Insurance companies know how likely it is that you will die or be hurt in an accident and how likely it is that your car will be damaged or stolen. The information that the insurance company has collected over the years is put into "actuarial tables" that give insurance adjustors a quick way to see how likely it is that almost anything will happen.
It's important to remember that insurance works because you (the insured) and they (the insurance company) don't agree on something (the insurance company). You think it's likely that you'll be in a car accident at some point. The car insurance company thinks it's unlikely that you will. And the insurance company will take your money to show you that you are wrong.
So, how much car insurance should you get above and beyond what your state requires?
"Take a look at your own finances," said Dennis Howard, who runs the Insurance Consumer Advocate Network and used to work as an insurance adjuster. "Get enough liability coverage if you have things you want to protect, which is all insurance does."
Howard also said that the limits of any uninsured or underinsured motorist coverage you buy can't be higher than the limits of your liability coverage. He said that this kind of insurance can be helpful because it will cover lost income if you are hurt in a major accident and can't work for a few months.
The way you drive could also be a factor. If you've had a lot of accidents in the past, have a heavy foot, or drive a long way on a dangerous, winding road, you should get more coverage.
"Consumers should also know that they don't have to buy the package [of collision and comprehensive coverage]," Howard said. "You could buy comprehensive insurance but not collision if your car is older, you have a good driving record, and there is a low chance it will be totaled in an accident but a high chance it will be stolen." This seems like good advice for anyone who owns a 1989 Toyota Camry and is reading this article. For several years, this has been the most stolen car in the country (often for parts). But most of the cars on the road probably have a lot more than 100,000 miles on them.
At this point, it's important to say something that will make you think. Just because you have car insurance doesn't mean that nothing bad can happen to you. First, the insurance company has to show that the claims they make in the contract are true. TV ads show friendly adjustors at the sites of natural disasters handing out claims checks like coupons for cocktail wieners at a grocery store. But, in case you haven't noticed, TV ads aren't exactly like real life. If you get into an accident, your car insurance company will look over your claim carefully before sending you a check. And the check might be for a much smaller amount than you wanted. Because of this, you should know the details of your policy inside and out and call the company if you have any questions.
After making some practical and philosophical choices, it's time to go shopping. Set aside about an hour for this job to start. Bring your current insurance policy, the number on your driver's licence, and the registration for your car. Have a lot of coffee. Have a phone close to you. And make sure your computer is on.
Start with the things you can do online. You can type your information into many websites and get a list of quotes to compare. It takes about 15 minutes to fill out the form. If you get bored, just tell yourself that you are saving money and can use that money to buy yourself something nice. If it takes you two hours to do all of your shopping and you save $800, you are making $400 an hour. Make notes about the companies you are looking into in a separate computer file or on a piece of paper with different sections. This will keep you from doing the same thing twice.
