How To Compare Auto Insurance Rates

Insurance can be confusing. When shopping for automobile insurance, you may receive quotes that vary by hundreds of dollars. So what do you need to review in each quote to make sure you are comparing apples to apples, rather than apples to oranges?

  1. Coverages being offered. There are a number of coverages available on most automobile insurance policies. They include:

  • Comprehensive Coverage - Comprehensive coverage protects you in the event of a loss to your insured vehicle not caused by collision. The most common losses include flood and weather damage, vandalism and theft. Most policies are also written to include animal collision as a comprehensive coverage.
  • Collision Coverage - Collision coverage provides coverage to your vehicle in the event of a loss caused by collision with another object, including but not limited to another vehicle or stationary object. Most common is an auto accident involving multiple cars, but it also includes loss where you may run into a building, light pole or tree.
  • Rental Reimbursement - Rental reimbursement is written into your policy to provide coverage for the rental cost you incur as a result of a covered collision or comprehensive loss. Typically, this coverage applies while your car is being repaired after an accident.
  • Medical Payment/PIP Coverage - Medial payment coverage varies greatly by state, but is typically available in the event of an injury to you or passengers in your vehicle while they were involved in a covered accident.
  • Uninsured motorist Coverage - Uninsured motorist also varies by state, but is designed by provide you coverage for damage to your vehicle caused by an uninsured driver.
  • Underinsured motorist coverage - Underinsured motorist coverage is similar to uninsured motorist vehicle in that it varies by state. Where it differs is that with underinsured motorist coverage, the responsible driver has insurance, but has limits which are lower than those you carry for your underinsured motorist coverage.
  • Bodily Injury Liability Coverage - Bodily Injury Liability coverage protects you if you are responsible for a loss and there is an injury to a third party caused by the accident.
  • Property Damage Liability Coverage - Similar to Bodily Injury Liability coverage, Property Damage Liability Coverage will protect you if you are responsible for an accident in which a third party suffers property damage.
  • Deductibles. A deductible is the amount that you will owe in the event of a loss. Typical automobile insurance deductibles range from $100 to $1,000; depending on the coverage. The lower the deductible, the higher your premium will be. While a high deductible may save you money on an annual basis, you will need to weigh the amount you are going to be out of pocket in the event of a loss with the premium savings.
  • Limits. Most automobile policies will not have written limits for Comprehensive or Collision coverage. Those coverages will be available up to the value of your car. However, limits will come into play if you have rental reimbursement coverage, uninsured motorist, underinsured motorist coverage and your property damage/bodily injury liability coverages. Make certain that you are comparing policies with similar limits when you look at the rate you are being offered. Higher limits of coverage will result in higher premiums, but the purpose of insurance is to protect you in the event of an accident. You may be held legally liable for damages regardless of your limits, so make sure that you have sufficient limits to cover your potential exposure.
    By evaluating the three categories listed above, you can really compare one auto insurance quote to another. Make sure that you always evaluate all of your options and choose what is best going to protect you and your assets in the event of a loss.


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