What is the purpose of auto insurance? In some states you need auto insurance just to drive. The purpose of insurance is to protect you and what you own. If you are uninsured you risk everything- not just your car but everything you own. If you hit someone you could be sued for all your assets or if you get hurt you may have to sell everything to cover your medical bills. So when you go shopping for auto insurance what do you do?
Step One-Figure out how much you need
When it comes to auto insurance, you want to be have enough coverage if you get in an accident but you don’t want to pay any more than you have to. So think about.
1. How do you drive?
Know your driving record, your current coverage and the premiums you are paying. Are you a good driver? Have you been in a lot of accidents? Is your car old and how many tickets have you had.
2. What kind of car do you drive
3. What do you own?
To find the right auto insurance, first make sure you know how much your state requires. For example: The state of California requires: Bodily injury liability for one person in an accident $20,000. Bodily injury liability for all people injured in an accident $40,000 and property damage liability for one accident $10,000. In comparison, the state of Hawaii requires: Bodily injury liability for one person in an accident $15,000. Bodily injury liability for all people injured in an accident $30,000 and property damage liability for one accident $5,000.
Know what is required then decide what you need in addition. Let your financial situation be your guide. If you have no assets, don’t buy more coverage than you need. Are you cautious? If so, you might not need the maximum coverage. How much you get depends on a few things. What is required. How much do you have and how much family do you have.
Keep in mind that you don’t have to buy collision and comprehensive coverage. If your vehicle is older, if you have a good driving record and if there is a low likelihood that it would be totaled in an accident, but a high likelihood of it being stolen, you could buy comprehensive but not collision.
Also, you should contact your auto insurance company or pull out a recent bill. Jot down the amount of coverage you have and what you are paying for it. Take note of the yearly and monthly cost of your insurance since many of your quotes will be given both ways. Now you have a figure in mind to try to beat.
Step Two- Comparison Shop
Check out both national and direct providers. Look at the national companies and then a local provider. For instance. DTRIC is a local insurance company in Hawaii. Call to compare rates from nationwide providers like State Farm. Also see how long it takes to get customer service on the phone or online. For car insurance you want a company where you can get in touch with your agent quickly.
A direct provider that sells insurance directly may give different service in your area than a national provider like State Farm that sells insurance through local agents.
Step Three-Look for Discounts
While talking to the insurance companies’ telephone salespeople, make sure you explore all options relating to discounts. Insurance companies give discounts for a good driving record, favorable credit score, and certain occupations or professional affiliations and more. Some companies even offer discounts for safe driving.
Step Four-Cancel Your Old Policy
After you pick your new policy cancel coverage with your existing insurance company if you have a policy. If you need to carry proof of insurance, make sure you either have it in your wallet. You could keep it in your glove compartment, but if your car is stolen the thief will have everything he/she needs.
Remember the hardest step is just beginning the process. Don’t be intimidated. You could save thousands by asking a few questions and following this easy plan.