Explaining Auto Insurance Price Quotes

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Things to Remember...
  • Comparison-shopping for automobile insurance should be performed at least once a year to make certain that you are receiving the best price for car insurance
  • Insurance’s purpose is to foresee problems and spread losses out over a number of entities to prevent any one individual from being saddled with the entire loss
  • Request an e-mailed or printed quotation from the insurance company that provides a quote
  • Examine all the insurance quotes; compare the coverage to make certain that each quotation provides the same coverage
  • Multi-policy discounts may be available if you place your homeowner’s insurance and your car insurance with the same company

Comparison-shopping for automobile insurance is a budget-friendly practice that you should perform at least once a year to make certain that you are receiving the best price for car insurance.

It’s easily done on the Internet, but not all of us are familiar with the ins and outs of insurance so, even though we may get comparison quotes, we’re faced with a puzzle.

Comparing car insurance is easy with the FREE comparison tool at the top of this page. Simply enter your ZIP code to get started now!

About Car Insurance

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Insurance has a purpose in society. That purpose is to foresee problems and spread losses out over a number of entities to prevent any one individual from being saddled with the entire loss.

The way this is done is to require everyone to purchase insurance, as states do with car insurance.

Theoretically, everyone carries car insurance so that, if an accident occurs, the burden of loss is spread out to be borne by everyone that is insured.

This is done through insurance companies and laws. That’s complicated, isn’t it? To simplify by using an analogy, think of it this way:

You have a group of friends who all agree to put a certain amount of money in the bank all together to pay if one or the other of them has an accident.

When your best friend, George, has an accident, the bank account is used to pay for the damages he has caused to the stranger’s car that he ran into.

That’s okay because all of your friends pay additional money into the bank account in the form of premiums to pay for future losses.

George is assessed a bit extra in his premium because money was paid out for his accident. The money in the bank, though, is replenished and is available to pay for further accidents.

Wouldn’t it be even better if the friends invested the money in the bank account so it could grow when it’s not being used to pay for accidents?

That way, even more money is available to pay for accidents. Then, you could expand to insure even more friends against accidents.

Think of the group of friends as an insurance company that pays for accidents and you have the idea of insurance.

Insurance Quotes

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When you request a quote from an insurance company for car insurance, a certain set of coverages is assumed by the company. These types of coverages are as follows:

  • Bodily Injury Liability – This type of coverage pays for your legal liability if you have an accident, cause bodily injury, and the law says the accident is your fault. It is intended to pay for the medical, rehabilitation, and injury to the other person or persons
  • Property Damage Liability – This coverage pays for your legal liability if you have an accident, it’s your fault, and legally you have to pay for damage to the property of others
  • Medical Payments Coverage – This pays for incidental medical payments, including funeral expenses, for you, your family, and passengers in your car whether the accident is your fault or not
  • Uninsured and Underinsured Motorists Bodily Injury Coverage – This pays for medical bills if you have an accident with another motorist, it is their fault, and they do not have insurance or do not have enough insurance to pay for the damage.
  • Uninsured and Underinsured Motorists Property Damage Coverage – This pays for damage to your car if you are involved in an accident with another motorist, it is their fault, and they do not have insurance or do not have enough insurance to pay for the damage

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 Optional Coverage

  • Comprehensive Coverage – This type of insurance covers damage to your car caused by other than car accidents: theft, fire, vandalism, weather, falling objects, and animal damage. A deductible is usually applied. You need to determine the size of the deductible by using the value of the car as well as what you are able to cover
  • Collision Coverage – This type of coverage applies to collisions that damage your car whether it is your fault or not. Again, a deductible is usually applied. With both Comprehensive and Collision, the lender on your car may demand this coverage as a part of their contract
  • Towing and Labor – Some insurance companies offer this coverage as a part of their policies
  • Rental Reimbursement – Offered to cover the costs of renting another car if yours is disabled. Some insurance companies offer this

How to Read an Auto Insurance Quote

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Request an e-mailed or printed quotation from the insurance company that provides a quote. The coverage will be listed under the names provided here.

Ordinarily, the premiums for each coverage are broken down to reflect the cost of that type of coverage to allow you to assess the cost of each.

How to Determine Limits of Liability

The actual limits of liability required by law are usually indicated on your state insurance website. The limits shown there are the lowest limits required by law, so take into consideration the costs of medical treatment, car repair, and possible legal fees.

Determine if these limits are enough to protect the assets that you have or will have.

Many young people assume that, because they have few assets, they do not have to carry much insurance.

The reason this is not true is that a judgment can be assessed, under certain circumstances, at any time upon the discretion of the person who received the judgment against you.

Therefore, a number of years after the incident, when you do have assets, you may end up paying that judgment. In carrying higher insurance limits, you may be protecting your future.

Comparing Insurance Quotes

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Examine all the  insurance quotes; compare the coverage to make certain that each quotation provides the same coverage.

Make certain that all the cars you have are listed on the quotes. Then, and only then, compare the insurance premiums.

Check the insurance companies you’ve chosen to see their financial ratings. Forbes and A.M. Best are good places to check financial strength.

A strong financial rating is important so you can be sure the company will be available if a catastrophe occurs such as Hurricane Sandy.

Examine discounts that may be available to you if you purchase from each particular company. Look through their website to see if they offer discounts for certain groups such as graduates from certain colleges, or certain occupations.

Multi-policy discounts may be available if you place your homeowner’s insurance and your car insurance with the same company.

Accident forgiveness incentives may exist if you have had no accidents. These may or may not show up on the quotations that are provided to you.

Finally, each website has a number to call or an online agent to contact. If you have questions, be sure to ask before you purchase the policy. Questions are always well received so continue until you receive an adequate answer.

Use the FREE tool below to start comparing auto insurance quotes instantly. Just enter your ZIP code.

FREE Auto Insurance Comparison

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