What should I look for in cheap auto insurance providers?

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Things to Remember...
  • The most important consideration with auto insurance is to ensure that the policy holder’s financial future is well protected
  • Experts recommend that all drivers carry at least $500,000 liability coverage, which is more than the state requires
  • Make sure you check to for any discounts that you may be eligible for
  • It pays to shop around, since it is possible to pay twice as much for the same insurance coverage

Nobody wants to pay more for auto insurance than necessary: It’s a little like taxes that way. But no one should be underinsured either.

The most important consideration with auto insurance is to ensure that the policy holder’s financial future is well protected. Consider what is affordable in terms of consequences if an accident should happen.

The best way to keep insurance costs down and maintain adequate coverage is to do some careful thinking up front. Compare rates from auto insurance companies based on personalized factors.

You can use our FREE auto insurance comparison tool to start saving money today by entering your ZIP code. Ask the following questions and write out the answers:

  • How much will liability insurance provide adequate protection?
  • How important is collision insurance?
  • What discounts are available?
  • What are the ages of the drivers?
  • Would an umbrella policy be useful?
  • Is personal injury protection really necessary?
  • Does this insurance company make the claims process straightforward and timely?

Taking each point separately, write down the answers and compare the real cost of insurance with the adequacy of coverage.

Each individual’s needs will be different due to age, amount of assets, and other variables.

How much will liability insurance provide adequate protection?

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This issue is far more important than the amount of the deductible. Experts recommend that all drivers carry at least $500,000 liability coverage. Those with greater assets require greater coverage.

If judged responsible for an accident, the driver and the owner of the car are vulnerable to liability lawsuits.

Medical costs for persons involved in a serious accident can mount into the hundreds of thousands of dollars.

Add to this lost income for the accident victim who is unable to work for a lengthy period of time, and the liability issue looms large indeed.

A driver who owns a home or other large assets needs to ensure that those assets are adequately protected in case of serious liability issues. Instead of keeping the deductible low to avoid occasional out-of-pocket costs, it is wiser to invest in greater liability coverage.

Some policies differentiate between total liability coverage and per-person coverage. This can leave the policy owner vulnerable if 1 person is injured and has high medical costs. Make sure the policy is written so that total liability and per-person coverage are the same.

How important is collision insurance?

Collision insurance pays for repairs to the vehicle a policy owner drives or for replacement in the case of a totaled car. If the car is old and of lower value, consider carefully whether collision coverage is needed.

What discounts are available?

Many insurance buyers overlook this issue when comparing quotes. Look for discounts if the car is stored in the garage and has certain safety equipment installed.

Check on discounts for clean driving records free from accidents or violations.

Some companies offer discounts to older drivers who take a defensive driving course. Also, check on discounts for those who drive fewer miles per year. Many companies offer a price break for insuring more than one car.

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What are the ages of the drivers?

Insuring a teenage driver may add 50 to 500 percent to the policy cost, depending on the company.

Some auto insurance companies will offer teens cheap insurance quotes if the teen maintains good grades and a clean driving record. Having the child take driver’s education can also help.

If the teen attends college more than 100 miles from home, look into a discount from the company because he obviously won’t be driving the car very much.

Would an umbrella policy be useful?

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Drivers who are also homeowners should look into having the same company insure both the home and the car. An umbrella policy could cut costs and raise the level of liability insurance.

It is unlikely that both an automobile accident and a home-based liability issue will arise in the same timeframe.

The umbrella policy could raise liability coverage to $1 million, providing a strong defense for the policy owner’s assets.

Umbrella policies start at around $200-$300 per year, making them quite affordable. This is a great alternative for those who both drive and own a home.

Is personal injury protection necessary?

If the driver and passengers are covered by health insurance, that will pay for medical expenses related to an accident. Having two insurance companies cover the same type of expense represents an additional cost.

Add to this the hassle that insurance companies get into when it is not clear which company is the primary insurance and which is the secondary insurance. Why pay more and get into that sort of situation?

Does the insurance company make the claims process straightforward and timely?

Auto insurance companies vary in their response to a customer claim. Make sure you have a clear explanation of the process, the time it takes for a decision to be made, and the documentation required for a claim.

The National Association of Insurance Commissioners keeps records on consumer insurance complaints and can provide accurate information about a company’s reliability.

Keep in mind that getting cheap insurance will do no good if the company does not stand by the policy.

It pays to shop around, since it is possible to pay twice as much for the same insurance coverage. However, be sure to compare both price and level of coverage.

Enter your ZIP code into our FREE auto insurance comparison tool to start making the comparisons that will save you money. Check on discounts.

FREE Auto Insurance Comparison

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