Auto insurance may appear complicated at first, and there are a few basic things to know when shopping for auto insurance quotes. Your car insurance package will include any coverage required by law, auto insurance required by a bank if you are making payments on a vehicle, and the kind of car insurance you'll need to protect yourself financially in case of an accident.
The best auto insurance advice? Get very familiar with some critical insurance issues:
Know the laws in your State
Auto insurance is not standardized for all states. Some states require specific types and amounts of liability coverage to include property damage and personal injury coverage. Other states are far more lenient in their requirements.
Do you know what the minimum liability coverage is for your state? Some state laws are designed to pay claims regardless of who is at fault. Is your state one of them? Know what is required in your state and understand how the laws in your area affect you whether you are the victim or if you are at fault in an accident.
Know your minimums
Your auto insurance quotes include minimum coverage, but in many cases these minimums are not enough to pay for damages caused in an accident. Ask your insurance agent how much a typical car insurance claim is worth on the coverage you want and compare those typical amounts with the amount of coverage on your policy. You may learn that your minimums will only protect you for part of the true cost of an accident.
Optional Protection
The auto insurance protection required by law in your state may not protect you under certain circumstances. In many states you may not be required to hold comprehensive coverage to protect your vehicle from "acts of God", vandalism or storm damage, but depending on where you live the risk of such damage could be high.
The best insurance advice for optional insurance coverage? Evaluate your risks and protect yourself accordingly. You may not feel the need for comprehensive coverage in an area where the weather is calm and you aren't worried about vandalism, but those who live in areas prone to harsh weather or in urban settings where crime rates are higher may feel the need to protect their investment with additional insurance.
Evaluate your deductibles
Part of any list of car insurance quotes includes a set of deductibles. Your insurance deductible is the amount of money you pay out of your own pocket before the insurance company will pay your claim.
The old auto insurance rule of thumb goes, "The higher your deductible the lower your monthly premiums." But those lower premiums can cost you more if you need to make a claim, and it's best to evaluate your deductibles for every aspect of your coverage.
If you can't afford to pay the amount of your deductible in full on short notice, consider lowering the deductible amount and accepting a slightly higher monthly insurance bill to protect you from having to pay a large sum after an accident.
Those who specialize in giving auto insurance advice recommend you adjust deductibles individually--you may wish to carry a lower deductible on part of your policy you think you are most likely to use, and a higher deductible on any part of the policy you feel you might not need.
Double coverage, out-of-state driving and residency changes
Auto insurance laws are designed to prevent you from being paid twice on a single claim. If you carry personal injury protection where your medical insurance coverage also applies, you may only be paid once for a claim regarding your hospital bills. Examine your insurance policy carefully to avoid paying for double coverage.
You should also understand the "fine print" of your insurance policies to make sure you are truly covered as there may be exceptions or exclusion clauses for certain types of accidents or if the accident is judged to be your fault. It all depends on the nature of your coverage and under what circumstances a claim may be denied.
You may need to examine a health insurance policy back to back with your auto insurance to see where you may be protected under one policy but not the other.
Insurance law for specific policies such as collision and comprehensive vary greatly from state to state. This is the reason why most insurance web sites require you to enter your state of residence or zip code before you can get car insurance quotes.
While your coverage applies no matter what state you happen to be traveling in (unless your policy states otherwise), if you have recently moved to a new state you are required to switch insurance to comply with the laws in your new zip code. This is true even if you stay with your original insurance company.
When in doubt about any of these issues, check your state's insurance commission or local insurance agent to learn about your insurance rights and responsibilities.
See also: Auto insurance FAQs