December 15, 2009

5 Things You Need to Know Before Buying Auto Insurance

If you are purchasing a new car or are currently paying thousands of dollars into your auto insurance policy because of traffic violations, an accident or a low credit rating, shopping for auto insurance quotes may be worth your while. Buying auto insurance is one of those necessary expenses that you shouldn’t be passive about. When reviewing auto insurance quotes choose the one that gives you the coverage you need at a price you can afford. Before you sign up and accept the first policy that comes along, you’ve got to do a little work of your own. Here are five steps that may help.

1. Determine how much coverage you need. You want to be adequately covered in case of an accident, but you don’t want to pay any more than necessary. First, determine what is required in your state. Every state has minimum auto insurance requirements, and if you’ve got a car loan, the lien holder may have further requirements. This will tell you the minimum coverage. Then, it’s up to you to decide how much you need to feel comfortable.

2. Review the factors that determine your rate. Before buying auto insurance check your driving record, your current coverage and your current auto insurance rate. The best source for this information is your current insurance company. They’ll be able to tell you what you can expect to pay based on these factors.

3. Shop for auto insurance quotes. Now that you know what you need and what is affecting your rate, it’s time to shop for quotes. Begin online. A simple search engine search will yield dozens of auto insurance quote sites. Some sites will give you an instant quote, while others will contact you directly to assist you. Once you’ve reviewed all of the online options, start calling companies that couldn’t give you online quotes. With any auto insurance quote, ask the company to send you a copy of the written quote for your records.

4. Ask about discounts. When you are talking to an agent, don’t forget to ask about discounts. Insurance companies give discounts for multiple vehicles, a good driving record, safety equipment on the vehicle, a favorable credit score, certain organization affiliations and more.

5. Review and compare. Now it’s decision time. Before buying auto insurance you’ll want to check out the company. Often one quote will really shine as cheaper, but what happens when you need to file a claim? Visit your state’s department of insurance and out the satisfaction rate of the company you’re considering going with.

It’s a smart idea to compare quotes every couple of years to ensure that your auto insurance rate is competitive.