Every driver has to have car insurance and no one likes paying more to insurance companies than they must, especially when you can find cheap quotes online. Drivers can find the best and cheapest car insurance if they take a few minutes to compare rates from different carriers. Online comparisons offer consumers the ability to get multiple quotes from companies and review policies, coverage options, and deductibles.
By evaluating policies side by side, you are certain to find the provider most willing to offer the best coverage and lowest premiums. Below, savvy shoppers will learn how to compare car insurance rates and the important factors to keep in mind when shopping around.
Types of Car Insurance Coverage
Before you can effectively compare policies, deductibles, companies, and quotes, you must first research the types of car insurance coverage available. There are 3 main kinds of policies and add-ons: liability, collision, and comprehensive.
Liability Car Insurance
If an insured driver is at fault for an accident, liability covers claims and damages to the other car(s) as well as injuries to passengers, up to the limits of the auto policy minus your deductible. Your insurance company also provides legal counsel to defend you if a lawsuit is filed.
When you compare premiums to the cost of defending a lawsuit and paying damages, repairs, and medical bills out-of-pocket, you will see that liability coverage is really a bargain compared to the liability you may have if you are uninsured in an at-fault car accident. Even if a driver is not at fault for an accident, he/she may be named in a lawsuit and need an attorney to defend the claim.
Every state except Florida requires that drivers carry liability insurance, although each state maintains different mandatory minimum limits. Florida does not require liability coverage, but drivers should purchase the policy option for their own protection.
When drivers get quotes, they will find that there can be a substantial difference in the cost of liability car insurance between companies – some specialize in providing liability options and therefore offer the cheapest rates, while others are more geared towards servicing “high risk” drivers and purposefully give you higher premiums to keep you away.
Frankly, it all comes down to each company’s statistical analysis of your risk profile and how likely you are to file a claim that requires a payout. This is why the best way to find cheap car insurance is by literally comparing as many quotes as possible to find the lowest prices.
Collision coverage is not mandated by law, but it may be required as a condition of an auto loan from a bank or lender. Collision insurance pays for damages to your car caused in an accident. This type of policy usually has a deductible, which is the amount that you must pay for repairs before your insurance company makes any payments on your claim.
When drivers compare car insurance rates, they may want to consider a deductible of $1,000 instead of the more common $500 deductible because premiums are lower when deductibles increase. This is especially effective for vehicles that are old and have a cash value less than $3,000 to $5,000. What you save in premiums can be used to buy a new car should yours be totaled in an accident.
Comprehensive car insurance covers damages to your insured vehicle that were not caused in an auto accident. Comprehensive coverage includes damage from flood, hail, fire or arson, and natural disasters. Like collision, comprehensive has a deductible, and may be required as a condition of a car loan from a lender.
When drivers get rate quotes for collision and comprehensive insurance, they will usually find collision has higher premiums. However, if you compare rates for comprehensive coverage in different areas, urban drivers usually pay the highest rates. Unless required, most drivers do not need to buy comprehensive coverage.
When To Buy Collision and Comprehensive
Since collision and comprehensive coverage can be expensive, only drivers who need full coverage car insurance should buy these policy options. As a rule, anyone with a car loan should have full coverage since it helps cover the cost of the loan if the car is damaged beyond repair (totaled) before you finish full repayment of your loan. It also makes sense to carry full coverage on cars with high book values, since replacing a totaled car may not be affordable for most families.
If you have an older car with a low trade-in value, you should compare premiums with and without these coverages before deciding whether to buy full protection or not. If you really want or need full coverage, buy collision and comprehensive insurance with high deductibles to offset the costs.
Any driver with a car loan should carry GAP insurance. Since cars depreciate rapidly and you may be repaying an auto loan for up to 5 years, drivers sometimes owe more on their loan than the car’s book value. GAP pays for the difference between the amount of the loan and the book value of the car (the maximum amount collision or comprehensive pays).
Basically, whatever your car insurance company will not payout in a claim through liability, collision or comprehensive coverage, GAP will cover. Drivers will find that GAP insurance is very affordable and useful, and insures that drivers will not be making payments on cars they can no longer drive.
Uninsured/Under-insured Motorist Bodily Injury Coverage
Some states require that drivers carry uninsured motorist coverage. Uninsured or under-insured motorist coverage, also known as UIM, protects you and your passengers if anyone is injured as a result of an uninsured driver’s negligence. In most states, uninsured motorist coverage also provides extra liability protection when an at-fault driver does not have enough liability insurance to pay the costs of the claims (repairs, medical bills, property damage, etc.) arising from an accident.
Uninsured Motorist Property Damage Coverage
Even though liability insurance is mandatory in most states, there are still drivers who do not have any coverage at all. UM property damage coverage pays for damages to your car caused by an uninsured driver. While collision coverage has a $500 deductible, the deductible for uninsured motorist property damage is only $100. UM is cheap and affordable and a claim for UM property damage does not increase your rates since you are not at-fault in the accident.
Complimentary Roadside Assistance
Roadside assistance covers towing and labor for breakdowns or flat tires that occur during travel. A number of companies offer roadside assistance to their customers at no cost. When drivers get free quotes online, the cost of roadside assistance should be considered if not all of the companies offer the coverage for free. A free service offered through your provider can easily save you an AAA membership.
Upgrades like roadside assistance coverage can raise the value of a policy when drivers compare premiums of different carriers, though we encourage consumers to use a competitor’s pricing when negotiating. If one car insurance company offers complimentary roadside assistance, try to get your current insurer to throw in the coverage for free.
Comparing Car Insurance Quotes
In addition to allowing drivers to compare car insurance quotes between the best companies, online shopping comparisons encourage drivers to research the costs of different types of policies and coverage. By adding and subtracting different options, drivers can decide between liability, comprehensive, collision, GAP and other add-ons. This allows drivers to customize their own policy to the get best coverage for the cheapest price.