How Do I Buy Car Insurance?

Auto Insurance“How do I buy car insurance?” If you believe what you see on television it takes just a few minutes and is so simple a caveman can do it.

The average car insurance premium in the U.S. is now over $1,000 a year and is increasing at a rate that exceeds inflation. (That’s because much of the expense is medical when a claim occurs and medical expenses are skyrocketing.) It might be a very good idea to spend a bit more than seven and a half minutes when premiums vary by hundreds of dollars between companies.

Plus when you consider what is at stake in the way of court awards after large accidents, selecting the proper coverage is really something you shouldn’t do without the help of a licensed professional. I have forty-five years of experience in the insurance industry and I still buy my personal insurance through an agent. If something goes wrong I want someone to hold responsible.

However . . . that doesn’t mean you shouldn’t know the basics before you start marketing your coverage.

Before You Start on Your Buying Journey Consider the Following

What coverage do you need? Each state has a minimum or statutory amount of coverage for auto liability. For most states it’s laughably low. I suppose our lawmakers think it’s better to have “some” than none at all. But when the average fender bender can go over $10,000 with today’s bumper-less wonders physical damage liability limits of $10,000, as is required in some states, just doesn’t get the job done. And $30,000 of bodily injury per person, as it is in my state of Minnesota barely pays to get an injured person into an Operating Room.

I would recommend at least limits of $100,000 per person bodily injury, $300,000 per occurrence bodily injury and $100,000 per person property damage. That’s the minimum anyone should have.

The average person should carry $250,000 per person bodily injury, $500,000 per occurrence bodily injury and $250,000 per person property damage. They should also purchase an umbrella over the top.

If you have a loan on your vehicle you will be required to carry physical damage on your car. If your car is older and you aren’t required to carry comprehensive and collision you might want to drop those coverages. However, cars carry their values a lot longer now. Check your car’s value online at this site and decide if you can take the financial loss if it is stolen, catches on fire, or is totaled in a collision.

The next thing many sites suggest you do is see what kind of discounts there may be available with certain companies.Please be aware that buying auto insurance is a bit like shopping for a college. The stated premium before discounts is almost meaningless. It is the net premium that you will pay that matters, and not how it is determined. Some companies have very few discounts, but have great rates that are manipulated through their black box algorithms. You’re getting the “discounts” but don;t know it. Others have a raft of ‘discounts” but have a maximum pr policy of applicable discounts so that many of the discounts you think you’re getting don’t really apply.

Spend as much time making sure your credit rating is a fair representation of your personal financial history as you do marketing your auto insurance. For many companies the premium you pay will depend in large degree on your credit history.

Many online sites suggest that you read your policy and check out the insurance company before buying. Only a very, very small percentage of people actually read their policies and out of those I’m absolutely very, very few small percentage understand what they’re reading.

You can do searches online for reviews of companies. You can probably find as much good as bad about any given company. Our own company evaluation tool showed us that the vast majority of people want to say nice things about their carrier. You can look at the company’s J.D. Powers rating, which is as good an indicator as you can find, but what you’ll actually experience will vary greatly. I believe you need someone you can hold accountable that you can find when needed. To me that means a local independent insurance agent.

Other Enhanced Insurance articles related to Car Insurance Premiums:

Do I Need Full Coverage on a Leased Car

Does My Job Affect My Car Insurance Rates?

How Much Car Insurance Do I Need?

Cancellations vs. Non-renewals

Car Insurance Discounts

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.

Jim operates an insurance agent network called Insurance Partners, aggregating agents in the Midwest for over 25 years. He was National Agent of the Year for Metropolitan in 1993 and Midwest Agent of the Year for Travelers in 2011. He served as a founding board member of the Surplus Lines Association of Minnesota.

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