In the United States, all drivers are required to insure their vehicles from trucks to motorcycles and everything in-between.
However, finding the right car insurance policy to meet your needs can be a daunting task.
You’ve likely seen countless commercials and advertisements with each company claiming that they are the best, but how can you be sure you’re finding the right coverage at the right cost? Follow these five essential tips and you’ll never have to worry about overpaying for auto insurance again.
Review Your State’s Minimum Insurance Requirements
Before you start looking for quotes, it’s worthwhile to know what minimum insurance levels your state requires. While each state’s minimums can vary wildly, all fifty require some amount of the following:
- Bodily injury liability coverage per person
- Bodily injury liability coverage per accident
- Property damage liability coverage
The amount of coverage for each category can range from $5,000 to $65,000 with some states also requiring personal injury protection and uninsured/underinsured motorist coverage. The easiest way to determine the minimum levels of coverage you need is to do an online search for your state’s name followed by “minimum car insurance requirements.”
Understanding your state’s minimum requirements for drivers ensures that whatever coverage you decide on is above the legal limits set forth by the Department of Motor Vehicles (DMV) and Department of Transportation (DOT).
Make Sure Your Limits and Deductibles Fit Your Financial Situation
The reason you want to know what your state’s minimums are is to better assess what additional coverage you can afford. If you lived in Tennessee, for instance, you need at least $25,000 in coverage for bodily injury liability per person.
For many drivers, that minimum coverage isn’t enough. Evident bodily injury from an accident costs an average of $29,200, which could leave you on the hook to pay the remaining $4,200 out of pocket. With higher coverage, you can rest easy knowing your insurance company will take care of larger damages.
Deductibles are also an important part of the equation. The amount you pay out of pocket, or the deductible, is often lower when your policy includes higher levels of coverage. The $4,200 figure can quickly become $2,000 or less, making an accident far more affordable. Just keep in mind how much you could reasonably afford to pay if you were involved in an accident when looking at deductibles.
Compare Multiple Companies
Now that you have an idea of how much you can afford, it’s time to compare deductibles from multiple companies. Each has their own pricing models and costs, so it’s worthwhile to compare as many as possible during your search.
Consider comparing national companies as well as getting local insurance quotes to find the right price to meet your needs. State Farm and Geico may be major names, but a local agency may be able to offer you a lower monthly payment for the exact same coverage. Make sure to write down which companies have the best costs to meet your financial situation for reference.
Ask About Discounts
As you interact with insurance agents, you’ll start to gain a better idea of what agencies sound right for you. There will be plenty of factors to compare such as types of liability coverage, additional forms of coverage each company offers, and who can be covered when driving your vehicle (if another person regularly drives your car).
While asking about costs of coverage, make sure to ask about discounts as well. In many cases, a company may not advertise all the ways that drivers can save money on their premiums. Paperless billing, low mileage, taking defensive driver classes, and even having an anti-theft device in your vehicle can all net you a potential discount.
One final thing to consider is bundling. If you pay for multiple insurance products from the same agency, like home and auto, you’re likely to gain a significant discount on the cost of your premiums. It is almost always cheaper to take care of all your insurance needs through one company.
Outside of home and auto coverage, you can usually bundle life insurance policies as well. Multiple cars, motorcycles, and RVs that need insured can often be bundled as well. The more you can bundle, the more you stand to save. So, consider the entirety of your insurance needs and whether the company in question can handle those for you as well at a reasonable price.