How to Buy Car Insurance Find The Best Companies | SmartGuy

How to Buy Car Insurance Find The Best Companies

Insurance - Auto

Every driver needs to know how to buy car insurance - find the best companies, determine what coverage you need, and compare costs.  Operating an automobile without insurance is illegal.  The average cost of car insurance is almost $800 a year.  For most people, an $800 purchase is an investment.  Buying car insurance should be treated the same way. Take the time to research costs, coverages, and companies before making such an important financial decision. Determining the kind of policy you need is the first step. With almost 450 insurers in the business today, it is best first to decide what coverage you need before choosing companies.  There are six basic types of auto insurance coverage.

Bodily Injury Liability
Applies to injuries that someone covered under the policy causes to someone else.  States set minimum requirements for this type of insurance.

Personal Injury Protection (PIP)
Will cover treatment for injuries sustained by the driver and any passengers in the policyholder's car.  PIP will cover payments for medical treatment, lost work wages, and funeral expenses.

Property Damage Liability
Covers damage to someone else's property caused by your vehicle.  This covers damages to the other person's car as well as damage to fences, lamp posts, buildings, walls, telephone poles, or other structures your car might run in to.

Collision
Will pay for damage to your automobile in the case of a collision.

Comprehensive
Provides coverage for losses should your car be stolen or for damage from something besides an accident.  This includes fires, vandalism, hail, and collisions with animals.

Uninsured/Underinsured Motorist Coverage
Provides reimbursement in case you are hit by an uninsured or underinsured driver, or are the victim of a hit and run. 

Each state has its own car insurance regulations.  Insurance in all aspects is regulated on the state level through each state's Department of Insurance.  While the federal government does set some minimum standards, the ultimate responsibility rests with each state.  This means that insurance requirements in the different states can vary significantly.  You must carry the minimum amount of any or all six types of insurance required by your state in order to drive legally.

The next step in how to buy car insurance - find the best companies - requires some research.  While price is going to be an important factor in your choice, simply buying the cheapest car insurance can leave you in a bind should your company go out business.  To compare car insurance companies, look at their financial strength as reported by independent rating agencies like Standard and Poors.  This information is free.  You can also get information from your state insurance department to compare car insurance company complaints.

The final step is to get car insurance quotes from more than one company and compare the rates and coverage offered.  The cheapest car insurance will usually have the least amount of coverage.  When comparing car insurance quotes, look at the extent of the coverage as well as the price to make sure you are fully protected. 

It takes some time to learn how to buy car insurance - find the best companies is an important step.  When comparing companies and policies, don't cut corners.  The state minimums are usually not enough to completely protect you in the case of a traumatic accident. Also, ask your agent for any discounts that might apply to you, especially if you don't drive that much, have completed a defensive driving course, or have an anti-theft device.  Also, if you are buying a new car, check out insurance rates first before going car shopping.  Premiums can vary widely among similar vehicles.