CarInsurance999

How to Shop for Best Car Insurance

The right time to shop for insurance is Prior to purchase a vehicle, trade in a vehicle, add drivers to your policy or renew your policy.

Price comparison is the key to getting the most for your insurance dollar. Consumers think nothing of price shopping for televisions, radios or appliances to save $20 or $30, but forget to shop around for car insurance where 100s of dollars can be saved. There are 1000s of car insurers (or insurance companies) licensed in the United States, so there are plenty of locations to shop.

Before buying a car, determine your insurance costs. This is the first cost-savings step in purchasing car insurance. When you are shopping around for a new or used car, be sure you factor in the cost of insurance as well. High-performance vehicles are more expensive to insure.

Understand what insurance plan you are buying. Before you start calling to ask for price quotes, you need to familiarize yourself with the insurance coverage you are buying. It is essential to know which coverages local law requires you to purchase and those coverages that you may prefer to purchase.

Look for more information. Several resources provide information about insurance. In addition to referring to the State Insurance Administration�s car insurance rate guide, you may also seek information from consumer groups, consumer publications (i.e. Consumer Reports) and the Internet.

However, insurers may use your credit history to determine what rate you will be paying for your car insurance. Not all insurers use credit report and you may get car insurance through insurance companies that do not use credit. For those insurance companies that do use credit, they are required to tell you at the time you sign up for the insurance that they will consider your credit history. If you request, an insurer must tell you how much of your premium is as a result of your credit score.

Credit reports are used to determine the kind of financial risk you present. Reviewing your credit report will help inform you of your position when you apply for certain credit and certain types of insurance, as well as permit you to correct any errors you identify. You are entitled to review your credit report at no cost once every Year. For questions or to make corrections to your credit report, you should contact the Federal Trade Commission, or any of these credit rating agencies: TransUnion, Equifax, or Experian.

For those insurers that use credit history to determine a portion of your premium, they are needed to review your credit history every 24 months, or you can ask the insurance company to do so once within your policy term. The insurer may only give you the benefit of any betterment in your credit history; it can't be used to raise your premium even if your credit deteriorates from what it was when you applied for your policy.

Do comparison shopping:

� Contact several insurers or contact insurance agents and brokers. Agents/ agencies have contractual arrangements with insurers to sell insurance on behalf of the insurance companies. Brokers do not have this kind of arrangements, but work with agents to locate or broker insurance on the consumer�s behalf. In either case, your insurance policy is with the insurer itself and not the agent/agency or broker. Insurers, agents, agencies and brokers are listed in the Yellow Pages and advertise in newspapers.

� Ask your relatives and friends for suggestions regarding buying car insurance. In addition, many banks, employers and special interest groups offer insurance directly to their members.

� The Internet also provides a variety of insurance information. Many insurers have web sites and/or work with non-affiliated quoting vendors to provide insurance premium quotes on-line.

Ask for price quotes:

In order to make an apples-to-apples price comparison, you must provide the same information to each insurance provider or insurance agent. The following information is normally wanted: make/model/year of the vehicle you want to insure, average annual miles driven, the region in which you live, the types of coverages and limits for those coverages that you wish to purchase and driving record (accidents or violations) of the vehicle operators. This information is required to provide you an accurate quote.

Ask about deductibles:

A deductible is the amount you accept to be responsible for in the event of damage to your vehicle (i.e. accident, fire or vandalism). If you pick a high deductible, you will pay more money out-of-pocket for any damage; however, your insurance premium should be lower.

Ask for Discounts:

Once again, to help keep rates down, ask what discounts the insurance provider offers. Make sure you supply all information that may result in a discounted premium (e.g. security devices, safety devices, good driving record, good student, defensive driving courses, multi-vehicle or multi-policy discounts, etc.).

Protect yourself from insurance fraud:

Once you have picked an insurer, contact the State's Insurance Administration to check that the insurer is licensed to sell insurance in your State. It is illegal for unlicensed insurance companies to sell insurance. If you choose to use a insurance agent, also verify that the insurance agent is licensed.

Financing Insurance:

Not everyone can afford to pay their insurance premiums upfront; therefore, many insurance companies offer installment plans. In addition, your premium can be financed by a premium finance company in exchange for your agreement to pay interest and service charges.

Whether you select an installment plan or a premium finance company, ask the below questions before buying the policy:

� How much are the monthly installments? � How much is the downpayment? � How many months will payments be made (i.e. 6 or 12 months)? � What is the interest rate on the premium payments (if the payments are financed)? � What other costs or fees are associated with financing the premium? � Does the insurance company offer an installment plan? Is there an installment charge or service fee? � How much is the total payment over the period of the policy? � Is a premium finance company financing the payment?

Other considerations: Price is a key factor in selecting an car insurance company; however, other factors also deserve consideration. Some consumers want to deal with a insurance agent that has an office in the same community or with an insurer that has a claims office nearby. Customer service is another important consideration.

Also, you should know how long the insurance company or insurance agent has been operating in in your State, how fast claims are processed and how often complaints were filed against the insurance company or insurance agent. Some of this information may be gathered directly from the insurance company or insurance agent. Also you can contact the State Insurance Administration in writing to obtain some complaint information.