A Guide to Finding Auto Insurance

By the DoItYourself.com Staff

Before beginning a search for new auto insurance, either via telephone or via internet, the most important thing to do is to get together all the information that insurers are likely to need. First, it’s important to get all the information together that is needed to produce an accurate insurance quote.

Gathering Personal Information

Here is a list of things to have handy when you start your search and a list of questions to ask potential insurers:

The driver’s license numbers for all insured drivers in the household
A list of traffic tickets those people have received in the last five years
Insurers may also ask for a list of accidents or other insurance claims for the last five years.
A copy of your old insurance policy handy and an idea of how long it was in effect.
Vehicle identification number (s) and the mileage
make and model of each car to be added to the policy

The vehicle identification number, or VIN, is available on the registration and title of your vehicle or is usually located in the driver’s side front windshield on the dashboard.

Be prepared to answer questions regarding:

average daily driving distance
the zip code where the car is parked at night
the distance driven to work
total distance driven in the average year.

Considering your insurance needs

You will also want to make sure that you have an idea before you start your search of the features and limits you want to have with your insurance. Most states have minimum requirements for property damage and liability insurance, but often those limits are very low and many not be enough to protect you in a major car accident. Make sure you understand what the limits and maximums of your policy mean.

For example, if the policy has a $250,000 maximum, what happens to you if the damages from an accident are over the maximum? In most cases, it means that you pay the amount over the maximum or get sued by the person whose property you damaged. With most cars valued at more than $20,000 and the cost of medical treatment, a major car accident could easily eat through that $250,000. Most policies also limit the medical expenses that the insurance company will pay for a single person. With diagnostic x-rays and emergency room visits costing in the thousands, it’s a bad idea to have this amount too low. For many policies, it is set at $10,000, barely enough to pay for minor injuries.

Questions to consider:

Also, have a good idea what features you would like to have with your insurance. Do you need road side assistance? In many newer cars, this is a feature offered when you buy the car, so paying for it on your insurance may mean double coverage for effectively double the cost. On an older car, especially one more prone to mechanical difficulties, road side assistance may pay for itself with just a single breakdown.

Do you need rental car coverage? Some insurance policies will pay for a rental car for their customer if the covered vehicle is in the repair shop after an accident. If this is your only vehicle, or if sharing a vehicle for several days or several weeks while your other vehicle is repaired is too inconvenient, this may be coverage to consider. It is generally only a few dollars a month and will pay for itself if you ever have to have auto body work done. With rental cars costing a minimum of $30 a day, this coverage will pay for itself in less than a week.

Deductibles

Know before you begin your search how much you would like to have as a deductible. A deductible is the amount of money you will have to pay if something happens to your car. Most companies offer $500 deductibles as standard, though they can be higher or lower. A higher deductible will mean lower insurance expenses, but if something happens to the car, you will need to be able to pay that amount out of pocket to repair your vehicle. If you can afford a higher deductible, consider increasing the upper maximums your policy will pay. Insurance is, after all, for the worst case scenario and the worst case scenario could involve a very expensive vehicle, or several of them.

A good guideline for determining where to set your deductible is to look at what you could afford to pay if your car was involved in an accident. Too often, customers base their deductible on the overall cost of the policy and end up with too little coverage or too much deductible. You should also consider the value of the car when determining the deductible.

If the car is several years old and has a blue book value of less than $5,000, it is very likely that a major accident could result in the car being “totaled.” If the car is totaled, rather than paying for the amount of damage done to the vehicle, the insurer will pay you the total value of the car minus your deductible. Be sure to keep this in mind when choosing a deductible, especially since this event could leave you without a car at all.

Questions you should ask the insurance agent

Once you have acquired all the information needed to get an insurance quote, the next step is to prepare a list of questions for the insurance agent. These questions should begin with questions designed to lower your insurance rate:

Do they have a discount for good drivers or for people who complete defensive driving courses?
Is there a good student discount?
Is there a good driver discount?
Is there a discount for having anti-theft devices or airbags in your vehicle?
Is there a discount if you have several forms of insurance with the same company?

All of these are common discounts. Make sure you get all the discounts you qualify for by asking the right questions.

The next questions should be about the quality of service the company offers. This can be especially important if you are dealing with someone via the internet and not in person.

What is the average time it takes to have a claim resolved?
Is there 24-hour support, in case I have an accident at 3 a.m.?
Are there locally available adjusters?
How long will it take after my accident for an adjuster to view my car and get me an estimate?
Are there auto body shops in my area that are pre-approved to work with my insurance company?
If I am unhappy with my car repairs, who do I call?
If I am in an accident, who handles my claim?
Does one person handle my claim throughout or is there a group of people to handle it?

Seeking information from friends and relatives

After you have compiled all the information and questions you need, it’s time to start asking people you trust about their insurance companies. If possible, ask people who you know have been in accidents recently, preferably both those who caused the accident and who were the accident’s victim. Sometimes, insurance companies can act differently depending on whether the accident was their policy-holder’s fault (that’s you) or if it was someone else’s fault. Generally speaking, the company expects someone else to pay if you were not at fault and will be much easier to deal with.

Again, it’s all about asking the right questions.

How did your insurance company treat you when you filed the claim?
Did they answer your questions?
Did they return your calls?
How quickly was your claim resolved and your car fixed?
After the accident, did you still feel comfortable with your insurance company?
Did everything in your car get fixed the way you thought it should be?
Do you feel like you pay a reasonable amount for your insurance?

Other useful resources

From this advice, you should be able to compile a list of some insurance companies worth contacting. The next step is to contact the Better Business Bureau or state agency which oversees insurance companies in your area and check to see if there have been complaints against the companies you are investigating. If you discover there are complaints about an agent or company you are considering doing business with, take a look at the complaint and evaluate its validity.

A complaint about the way a person was treated by an agent, may or may not be enough to cause you to look elsewhere for insurance. Several complaints about unpaid claims should be a huge warning sign to buy from someone else. This can be a matter of personal preference. You might be perfectly comfortable with a company that only calls you once a year while that has caused someone else to field a complaint. Most states should allow you to see the complaint and how the company responded to it.

Seeking out estimates

Then, it’s a matter of actually seeking out the estimates. Often, this can be a very time consuming task and require a lot of patience. if you are doing this the old-fashioned way, plan to spend several hours calling local agents and brokers and repeating the information you gathered at the start of this process. Agents are less likely to be swamped early in the day and mid-week, rather than on Fridays, near the close of business or at the end of the month when some policies come due.

Be prepared to supply the information to the agent or agent’s representative and have them call you back. Some agents will work up an estimate while they have you on the line, but often you are better served giving them the message and waiting for a call back instead of waiting while information is gathered and analyzed by the insurance company’s computers.

As with any pricing, ask the agent how long the price is good for and what precisely it covers. For example, many insurance companies charge a monthly fee if you pay for insurance by the month instead of in six-month increments. You may also want to ask how they arrived at a price, particularly if it is significantly higher or lower than other quotes you receive. The agent may have written something down wrong or the policy may not be the same as others you are considering.

Finally, ask the insurance agent how many claims his office processed in the last week or month or year. Pay particular attention to how well the agent treats you in the inquiry process. Right now, you have something they want: your business. Generally speaking, this is when your agent is working hardest for you, so if you don’t like the way they are treating you now, chances are you won’t like the service you get later.

Then, with quotes in hand, look at more than just the price in making your decision. While price is obviously a factor, look back through your notes and the way your questions were answered and find the policy that fits you best.

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