Everything to Consider When Choosing a Car Insurance Provider

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Let's face it: In today's society, no one can afford to drive around without having car insurance. Not only is it illegal to do so in forty-eight out of fifty states, but it can get extremely expensive besides.

So, knowing that you have to choose a car insurance provider, the question becomes: How do you pick the right one?

Choosing the right insurer for your vehicles depends on your needs, your budget, and a host of other factors. Here are just a few of the things you need to keep in mind as you browse insurance provider options for the perfect fit.

Premium Prices

The first and most obvious bar for most people to consider when choosing a car insurance provider is their premium prices. You can have almost the exact same coverage on two different insurance quotes, but see vast differences in premium costs. Why is this?

Well, for starters, every car insurance company considers different factors when rating drivers. Some companies may weigh certain factors more heavily than others, leading to a discrepancy in price. Common factors that can affect your premium prices for better or worse may include:

  • Your age: Younger drivers will pay more for insurance, more often than not
  • Your marital status: Single drivers are considered more high-risk than married ones, especially male drivers
  • Your gender: Male drivers tend to get rated as higher risk drivers than female ones
  • Your credit score: Yes, your poor credit rating haunts you even when shopping for car insurance
  • Your driving record: The more accidents you have on your record, the more you can expect to pay

Each of the above factors, plus many others, can factor into your final premium rating. Keep your personal rating factors in mind while comparing insurance costs, and there won't be as many unpleasant surprises.

The Types of Insurance Coverage Provided

Do you use your car for DoorDash, Uber, or your own personal business? Then it may surprise you to know that some insurance companies will not cover you under a personal auto policy. These uses can be considered "business use", which can require the purchase of a commercial auto insurance policy instead of a personal one.

So, what if you decide to be cheeky and don't tell your insurance provider what you really use the car for?

Well, first of all, that's insurance fraud, which is a serious crime that charges severe fines and might even land you in prison. If that's not motivation enough not to do it, you can all but count on receiving no coverage or claim payout if something happens to your vehicle during an unauthorized use of it. And, to add insult to injury, your car insurance provider will more than likely send you packing to another company, and your rates will spike as a result.

It's not worth the risk. Do your research ahead of time, talk with an agent if you think your car could be considered a business vehicle, and choose your insurance provider options accordingly.

Your Vehicle's Needs

The next factor you should consider when choosing an insurance provider is your vehicle's needs. Less than scrupulous companies where insurance agents work on commission might have agents tempted to load you up with far more coverages than you actually need. While it's better to have more coverage than you need and not less, you don't want to throw any money down the drain.

Let us be frank: The most common coverages coming into play when you look at your vehicle's needs will be comprehensive and collision. So, to simplify your internal debate:

When Should You Have Comprehensive and Collision Coverage?

If you're driving around in a brand-new, fresh-off-the-lot 2022 model, you need to have these coverages. End of story. If you're financing the vehicle, many car salesmen won't let you drive off the lot if it's not listed on your insurance.

Even if your car isn't brand-new, you still ought to have these coverages on it if the car is your daily driver and is worth more than your deductible to replace. (We'll discuss deductibles in further depth later.)

When Can You Go Without Comprehensive and Collision Coverage?

If your vehicle isn't your daily driver, you might be able to forgo these coverages, which often add a great deal of expense to your premium. If your car is particularly old and its value when totaled out is less than what your deductible would be, then comprehensive and collision coverage might not be worth it.

You can, of course, look to your own driving record and decide that these coverages aren't worth it because you don't have accidents. However, to do so is to take a serious gamble on other drivers not colliding with you. You can trust yourself to drive well, but if you can't trust other drivers to do the same, it's not worth the risk.

Online or Local Provider

Chances are if you've spent hours Googling "affordable car insurance for teenager", you've debated whether to use an insurance provider with a local office or a strictly online one. While the modern conveniences afforded by online-only insurance providers can save you time and seem to cut out the middleman, never underestimate the value of having a solid, local agent on your side. It can make your life much easier when you need to submit forms, receipts, and other documentation, as you don't have to rely on (sometimes finicky and dated) technology to get the job done for you.

How Much Can You Pay for Deductibles?

Another major factor to consider when choosing a car insurance company, especially if you have to have comprehensive and collision coverage, is your deductible. How much can you pay for your deductible if you were to get involved in an accident that damaged your vehicle?

To save costs, many drivers opt for the highest possible deductible on their policy. For most insurance companies, that's about a thousand dollars. However, you need to ask yourself, in all seriousness, "Do I have a thousand dollars lying about if I need it for this deductible?"

If the answer is, as is the case for most of us, "No", then you need to consider lowering your deductibles. Different insurance companies will offer different deductibles, so make sure to research thoroughly. Some can even offer deductibles of fifty dollars or less, though you can expect that your premiums will rise in inverse proportion.

Reputation Matters

When it comes to shopping for car insurance, reputation is everything. If you've heard a friend or family member complain about how difficult it was to file a claim with XYZ Insurance Company, you're not going to consider them for yourself. Make sure you vet each company's references and reviews before coming to a final decision.

You need to know how your prospective insurer handles their claims process, billing issues, and other account adjustments. No one wants to deal with a company that makes it difficult to make even the simplest of changes to your policy.

It might also behoove you, as part of this research, to check the insurer's financial standing. Insurance companies take in a lot in terms of premiums, but they also pay out a lot of expenses and have to support their workers' lives as well. If a provider is paying out more in claims than they take in from premiums, this can cause them to become insolvent.

Trust us, you don't want to deal with your insurance company going bankrupt. Lawsuits and unpaid claims and countless other issues abound when that happens. It's better to ensure that your insurer has a solid financial footing before you decide to invest your time and money into them.

Location, Location, Location

As in real estate, so in insurance. Location is one of those critical things you need to keep in mind when you're choosing a car insurance provider. Unless you're in one of the two states that don't require car insurance, you'll more than likely need to browse for a provider as soon as you get a roadworthy car.

Even within your state, your location can cause you to consider or reconsider certain coverages. Comprehensive coverage might seem like a waste if you live in the suburbs. However, if you live somewhere with extreme weather patterns or high risks of theft, you might need it.

By the same token, someone living in a busy metropolitan area will need personal injury protection and collision coverage more than someone living out in the country. Think about the driving risks you deal with in your area, and choose your coverages accordingly.

Choosing a Car Insurance Provider: Let's Review

There are many factors that can affect your choice of car insurance provider, mostly coming down to budgetary and coverage concerns. However, as long as you research your companies thoroughly and keep your needs in mind, you'll be able to find the right insurer for you. 

If you need further assistance on understanding your car insurance policy, check out our blog each day for more helpful how-tos!


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