Choosing an auto insurance provider can often be a daunting task and many people make their choice based simply on price, which can be a big mistake. Before choosing a carrier, there are a number of things to consider.
What Are Your Insurance Needs?
What are you insuring? Do you have a need for multi line coverage? Some auto insurers offer discounts on home, boat, motorcycle, rental property, etc. Having multiple coverages with a company often reduces your premium, sometimes rather significantly. Some companies may not offer homeowners, and if you own a home, you may be missing an important premium discount there.
Another avenue to consider is membership based companies. USAA and AAA are examples of membership based companies. USAA has restrictions regarding active/retired military but AAA is open to anyone. The additional benefits of membership through AAA include roadside assistance, discounts on insurance, travel agents, as well as discounts on restaurants, hotels, rental cars, etc.
Financial Risk
Especially in these tough economic times, people are looking to pay the lowest amount for auto insurance, but you may be opening yourself up for personal risk. If you own property or have a business, carrying state minimums for liability coverage is simply not enough. Most people have their primary residence declared as a homestead, but what about your investment property? If you own multiple properties and have a serious at fault accident, the other side might not be inclined to accept your liability limits as you have pursuable assets. Having high limits and looking into a PUP (personal umbrella policy) is well worth the extra cost, especially if you live in a litigious state like California or Nevada.
Coverages Often Overlooked
Comp/Collision coverage is often the most expensive part of your coverage, based on the vehicle you drive. If price is a factor, look to have the highest deductible possible, but do not go without this coverage, especially on a newer vehicle. You will be shocked at how expensive a minor collision can cost.
One of the most overlooked coverages is UM/UIM - uninsured/underinsured motorist coverage (where applicable by state). If you are hit by someone who is uninsured, this coverage provides coverage for your medical specials as well as compensation for your general damages (pain and suffering). Underinsured coverage will apply if the at fault party does not carry sufficient limits to satisfy your injury claim. The cost of this is often minimal per month but it is invaluable if the need ever arises.
Customer Service
Everyone has their preference on how they wish to conduct business and insurance is a perfect example of where people differ. Do you want the personal service of a dedicated agent? Do you wish to do everything online? Want round the clock service? Some companies like Progressive offer incredible round the clock, 365 days a year service. And unlike some companies who are choosing to revamp their structure and use independent adjusters, you can rest assured that it will be a Progressive employee who is inspecting your vehicle and arranging repairs with the chosen body shop.
Some lesser name or broker type companies will not offer the level of service that the larger, more well known companies do. An example of this coverage when driving a non-owned auto. Many people do not realize there is typically an exclusion in your policy if your car is not in the shop for repairs and you just choose to rent a car for a weekend. Bigger auto carriers will likely not deny this but the smaller, no frills companies will.
Overall, there is not one thing that makes any one auto insurer the “best”. Each offers unique services and it really comes down to what services are best for you. Request a copy of the auto policy details before you purchase and read through it carefully. Ask a lot of questions and make an educated decision before purchasing any coverage. And make sure to pay attention to their cancellation terms as some companies require payment of the entire policy term, even if you cancel after a few months.
