How to Evaluate Auto Insurance Quotes (2023)
Knowing how to evaluate auto insurance quotes based on coverage and price will help you find the best possible policy. Drivers who choose a minimum liability insurance policy will pay an average of $44/mo, while drivers who chose a full coverage insurance policy will pay an average of $132/mo.
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Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
Licensed Insurance Agent
UPDATED: Nov 27, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Nov 27, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Gap insurance pays for the difference between your car loan or lease amount and the loss amount paid to you if your car is declared a total loss
- Comprehensive auto insurance pays for damages that are not related to collision accidents
- Collision auto insurance pays for damages to your car if you are involved in an accident
Looking at auto insurance company quotes can be confusing, particularly if you do not know how to evaluate auto insurance quotes. In order to accurately evaluate auto insurance quotes, you need a foundational understanding of the different types of auto insurance available and what impacts your auto insurance rates.
Continue reading to learn about coverages and rates when evaluating auto insurance quotes. Once you have this basic information, you can then compare auto insurance options from several different companies before making a purchasing decision.
Concepts Behind Auto Insurance Quotes
Auto insurance has been an industry for almost as long as there has been an auto industry. The idea behind having insurance is that you pay premiums for a company to pay for damages that are the result of an accident.
Learn more: Auto Insurance Premium Defined
Auto insurance provides you with financial protection from potential bodily injury lawsuits that may place your personal and business assets in jeopardy.
In exchange for an insurance company’s financial protection, they use the money you pay for premiums to make investments and grow their company and keep financial reserves in place to pay for claims made by policyholders.
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Insurance companies evaluate potential policyholders based on the amount of risk the company takes on in terms of the likelihood of a customer making a claim and how much money it might potentially cost the insurance company.
Basically, the higher risk you represent statistically to an insurance company, the higher your premiums will be for a policy with them.
When you buy car insurance, it has coverage limits in place as part of the policy. Auto insurance coverage limits are the maximum amount the insurance company will pay for damages for an accident.
Learn more: Does auto insurance pay over the limit of bodily injury to settle lawsuits?.
For example, liability insurance limits are described in your policy by a sequence of three numbers.
If you see the numbers 20/30/40 on your auto policy, it means that $20,000 is the maximum amount that will be paid per person injured in an accident for medical treatment. Read “Do you need medical payment coverage on auto insurance” for more information.
A maximum amount of $30,000 will be paid for combined medical treatment for the entire accident. A maximum amount of $40,000 will be paid for property damage.
Deductibles are the amount of money that you have to pay out-of-pocket for repairs if you make a claim. The higher your deductible amount, the lower your rates are, since the insurance company will have to pay less money for repairs.
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Evaluating Forms of Auto Insurance
There are several forms of auto insurance, each with a different purpose:
Liability Insurance
Liability auto insurance is required coverage in 47 states. Liability insurance pays only for damages and injuries to the other driver and their passengers. It does not pay for damages to your car or for injuries you or your passengers receive.
Since mandatory liability insurance limits are very low, it is recommended that you purchase additional insurance if at all possible.
If you do not have enough insurance to pay for all the damage that result from an accident you cause, you can be sued for the remaining balance of costs.
Collision Insurance
Collision auto insurance pays for damages to your car if you are involved in an accident. Collision covers anyone who is driving your car and includes damages for hit-and-run accidents, hitting buildings, guardrails, and fences.
Comprehensive Insurance
Comprehensive auto insurance pays for damages that are not related to collision accidents. It pays for damages that are the result of events such as fires, floods, hail storms, or hitting an animal. It also pays for damages that are the result of vandalism or if your car is stolen.
This article also explains the difference between collision vs. comprehensive auto insurance.
Personal Injury Protection
Personal injury protection insurance is mandatory for additional auto insurance in 14 states. It pays for medical expenses, regardless of who caused the accident.
It pays for medical treatments, hospital expenses, and rehabilitation expenses. It also pays for legal costs and lost wages.
Underinsured/Uninsured Motorist
Underinsured and uninsured motorist auto insurance pays for damages and injuries if the other driver either does not have enough insurance or no insurance. You can find the best underinsured motorist coverage (UIM) auto insurance companies in this article.
GAP Insurance
GAP insurance pays for the difference between your car loan or lease amount and the loss amount paid to you if your car is declared a total loss.
Evaluating an Auto Insurance Quote
When you request a quote for car insurance, there are several things to consider. The first is the type of insurance being offered.
You should get a detailed outline of precisely what is included in the insurance coverage. Also, take into consideration what other benefits are included with a policy such as roadside assistance or travel concierge services.
The next thing to evaluating auto insurance quotes is the insurance company. You can find out information regarding financial stability from rating companies A.M. Best and Standard and Poor’s.
You can also find out customer satisfaction rates from JD Powers and Associates and Consumer Reports.
Finally, you should compare the actual premium rates. You can get premium rates from independent insurance brokers, insurance comparison websites from insurance company websites.
The Final Word On Evaluating Auto Insurance Quotes
Buying car insurance can be confusing initially. However, with some basic understanding of the different types of insurance, it becomes easier to know how to evaluate auto insurance rates and decide what auto insurance coverage you need.
To find the best auto insurance coverage and rates today, use our free quote comparison tool to evaluate auto insurance quotes.
Frequently Asked Questions
What factors should I consider when evaluating auto insurance quotes?
When evaluating auto insurance quotes, consider the following factors:
- Coverage limits: Assess the coverage limits for liability, collision, comprehensive, and other optional coverages to ensure they meet your needs.
- Deductibles: Determine the deductibles for various coverages and evaluate how they align with your budget and risk tolerance.
- Policy exclusions: Review the policy exclusions to understand what events or circumstances may not be covered by the insurance.
- Additional benefits: Check if the quotes include any additional benefits or perks, such as roadside assistance or rental car coverage.
- Claims process: Research the insurer’s reputation for handling claims and their efficiency in processing claims.
- Customer service: Consider the insurer’s customer service reputation, as it can impact your experience when dealing with policy-related queries or concerns.
How can I compare quotes from different insurance companies effectively?
To compare quotes from different insurance companies effectively, follow these steps:
- Gather quotes: Obtain quotes from multiple insurance companies either through their websites, agents, or online comparison tools.
- Review coverage details: Compare the coverage limits, deductibles, and exclusions across all quotes to identify any significant differences.
- Consider your needs: Assess which coverage options align with your specific needs, such as high liability limits or comprehensive coverage for a financed vehicle.
- Evaluate cost and value: Compare the premium costs associated with each quote while considering the coverage provided. Look for a balance between affordability and adequate coverage.
- Research the companies: Investigate the reputation and financial stability of the insurance companies offering the quotes. Read customer reviews and check their ratings with independent rating agencies.
- Seek expert advice: If you’re unsure about certain aspects or want more personalized guidance, consider consulting an insurance agent or broker who can provide insights and recommendations based on your circumstances.
What should I do if the coverage levels in the quotes differ?
If the coverage levels in the quotes differ, carefully consider your needs and potential risks. It’s important to balance affordability with adequate coverage. Evaluate the potential financial impact of different scenarios and choose a quote that provides the appropriate level of protection.
Is it advisable to choose the cheapest quote available?
While cost is an important factor, it’s not the only consideration when choosing auto insurance. Opting for the cheapest quote without considering coverage adequacy and the insurer’s reliability may leave you underinsured or facing challenges when filing claims. Balance affordability with sufficient coverage and the reputation of the insurance provider.
Can I negotiate the quoted premium?
In some cases, you may be able to negotiate the premium with an insurance provider. Consider discussing your quote with them and inquire if there are any additional discounts or adjustments that can be applied. However, not all insurance companies may be open to negotiation, so it’s worth exploring but not guaranteed.
Should I consult an insurance agent or broker for assistance in evaluating quotes?
Consulting an insurance agent or broker can be beneficial, as they have expertise in the insurance industry and can provide guidance tailored to your specific needs. They can help explain the coverage options, answer your questions, and assist in evaluating different quotes to find the best fit for you.
Are there any additional fees or charges that I should be aware of when evaluating auto insurance quotes?
Yes, it’s important to consider any additional fees or charges that may be associated with the auto insurance quotes. Some common fees include policy initiation fees, installment fees for monthly payment plans, and fees for making changes to your policy. Make sure to inquire about these charges to have a clear understanding of the overall cost.
Can I customize my coverage based on my specific needs?
Yes, most insurance providers offer options to customize your coverage based on your specific needs. You can often add additional coverage such as roadside assistance, rental car reimbursement, or coverage for custom parts and equipment. Discuss your requirements with the insurance provider and inquire about available options for customization.
Should I consider the insurance company’s customer service when evaluating auto insurance quotes?
Yes, customer service is an important aspect to consider when evaluating auto insurance quotes. A responsive and efficient customer service team can make the claims process smoother and provide assistance whenever you have questions or concerns. Research the insurance company’s reputation for customer service and consider reading reviews from current or previous policyholders.
How important is the claims process in evaluating auto insurance quotes?
The claims process is a crucial factor to consider when evaluating auto insurance quotes. A reliable and efficient claims process ensures that your claims are handled promptly and fairly in the event of an accident or loss. Look for insurance providers with a reputation for hassle-free claims handling and quick settlements.
How accurate are auto insurance quotes?
Auto insurance quotes are fairly accurate as long as you are honest on your application and don’t leave anything out.
What do auto insurance companies look at when calculating auto insurance quotes?
Auto insurance companies will look at your car, driving record, location, and other similar factors to calculate your rates.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.