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How to Shop For
Auto Insurance

So you need auto insurance? Well, here's the BobSaid.com method.

First, try to focus - Some of these sites sell every type of insurance there is. Stay on the topic, settle the auto insurance puzzle, then shop for something else if you need it. Same thing applies if you find yourself sitting with an agent. FOCUS! Just because one company or agent can get you a deal on auto insurance doesn't mean they are automatically the best on other coverages. If they push, ask if you will get a discount for buying more than one type of coverage with them.

As you proceed, please remember that BobSaid.com does not sell auto insurance or endorse any insurer. We are purely educational and have no vested interest in whether you buy insurance or in what type or amount you do buy. That said, settle in to do a little learnin'.

The Internet is a good place to compare auto insurance costs and learn about deals, but when shopping for insurance online, the old smart consumer rules still apply. Prices can vary a lot! Some insurers want business from your demographic group, some don't.

Step 1 - organize your information. Get out a pad of paper and write down the following:

1. State of registration and license number of each vehicle

2. City and zip code where each vehicle is parked at night

3. Year / make / model of each vehicle - be specific

i.e., 1998 Chevrolet Cavalier can be Cavalier, Cavalier LS or Cavalier RS

4. Vehicle Identification number (VIN) of each vehicle - It's on the registration and on a small plate on the dashboard.

5. Full name, home address and driver license number for each driver

6. How long has each driver lived at their current addresses?

7. Marital status of each driver

8. Home and work telephone numbers of each driver

9. What is the amount of your current coverage? Which insurer? How much is your current total premium? When does current policy expire?

10. How long since you last DIDN'T have auto insurance?

11. Engine - Size and number of cylinders, i.e., 2.2 liter 4 cylinder

Regarding 12-15, use your head. Do the math, just as the insurer will do. Does it add up?

12. Is any vehicle used for business other than driving to work/school?

13. How many days per week is the vehicle driven to work/school?

14. What is the one-way distance to work/school?

15. How many total miles per year is each vehicle driven?

16. What did you pay for each vehicle?

17. Lease or purchase? If lease, how long?

18. What safety/anti-theft devices does each vehicle have?

19. Airbags? Alarm? Seat belts? LoJack?

20. Where are the vehicles overnight? Street, private garage, common garage, driveway, carport, parking lot?

21. Have the vehicles been damaged and not repaired, including window glass?

22. Have the vehicles been significantly modified from the manufacturer's original specifications to increase performance, for racing, or for show?

23. Was any vehicle manufactured in another country for use outside the U.S.?

24. Is any vehicle considered to be a classic?

Step 2 - determine what your needs are and choose your types of coverage.

When doing research online, it is important that you are prepared. To receive the most accurate quote, it's important to know what you want, as well as what you have - for comparison. Warning - make sure that you are consistent in the length of coverage quoted. Don't compare a 6-month quote to a 12-month quote.

It can take 15 minutes to fill out some online forms. You'll answer a lot of questions about your driving history, how you use your vehicles, their makes and models, where you live, how many drivers are in your household, their occupations, types and amount of coverage you want, and everyone's eligibility for discounts. It can be tedious, but accurate quotes are worth the effort.

Some insurers may not quote or sell in your state. Go to another. Not all insurers will actually sell you a policy online, so you may find yourself dealing with an agent, eventually. That can be a good thing. You'll certainly deal with them when you have a claim. It would be nice if you knew whether they know what they're doing.

TYPES OF COVERAGE

COMPREHENSIVE AND COLLISION (Comp and Collision)

You do not determine how much comp and collision you purchase. That is determined by the value of your car. You do, however, determine whether you purchase it. Comprehensive pays for damage to your vehicle other than by collision - fire, storm, etc. Collision pays for repairing damage to your vehicle in a collision, regardless of fault. If you can afford to pay for repairs or replacement of your car, you might consider skipping these coverages, which are not legally mandated.

THE SPLIT COVERAGE BODILY INJURY LIABILITY INSURANCE CODE

EXAMPLE: 100 / 300 / 100

The above example of how Bodily Injury Liability coverage is shown on your policy illustrates how confusing it can be. The first 100 refers to the maximum amount, in thousands of dollars, that will be paid per person by your policy. If someone suffers more than $100,000 worth, you will personally pay the excess.

The second is the per collision maximum of the policy. It is very important that you understand that, in this example, 300 refers to the maximum TOTAL (in thousands) that your policy will pay, REGARDLESS OF THE NUMBER OF PEOPLE INVOLVED. If a driver under this policy injures a number of people, say in a school bus or in multiple vehicles, the insurer will not pay anything over $300,000. That will come out of your savings, home equity, retirement plan and a lien on your future income.

The third number, 100, refers to the total amount of property damage to other people's property that your insurer will pay. Do not underestimate how much Liability coverage you need. Many thousands of financial lives have been ruined by lawsuits resulting from traffic incidents.(Get some Krash Kits!) The legal minimums (15/30/5) are silly and totally insufficient. Consider the very real possibility that you or one of your family could cause a traffic collision. There are more than 17,000 collisions in the U.S. daily. Figure the enormous cost of health care, auto repairs/replacement, lost wages plus pain and suffering and you can see that one incident can easily cost in the 100's of thousands of dollars.

Here's a philosophical debate: Should those who have few assets - adult students, the poor, etc. concern themselves with purchasing large amounts of liability insurance? Many say No, they have nothing to protect and therefore a successful civil suit against them wouldn't hurt them financially. Bob disagrees. Many lawsuits against people of low economic condition result in life-long debt. You will not avoid being liable and being sued for damage you or your minor children who drive cause just because you don't currently have significant assets. The truth is, there's no such thing as over-insured when it comes to such coverage unless you are paying for insurance that you can't afford. That's the real limit - how much can you afford?

Start your search for Liability coverage at the $500,000 level and adjust, if necessary. Consider an umbrella policy which will normally cost a couple hundred dollars annually to increase the coverage to multiples of $1,000,000.

UN-INSURED AND UNDER-INSURED MOTORIST

This is actually simple. The question is - Compared to the people you might hit, how much are YOU worth? Simple answer - you are worth an equal amount. Therefore you get the same amount of this type of coverage, which provides for you, as you do Liability coverage, which provides for them.

OTHER, LESSER KNOWN, COVERAGES

  • Extended Transportation Expense Coverage - Helps pay for a rental car when you car is damaged due to a covered crash

  • Full Glass Coverage - If available, waives your comprehensive deductible for glass damage

  • Medical Payments Coverage - Pays up to a specified limit for medical expenses of your vehicle's occupants.

  • No-Fault Coverage or Personal Injury Protection (PIP) - Where legal, pays for losses resulting from injuries including time off work, funeral, etc. without consideration of fault.

  • Property Damage Liability Coverage

  • Towing and Labor Coverage

  • Underinsured Motorist Coverage

LOWERING YOUR PREMIUM

Get a high deductible. You can reduce your comprehensive and collision (comp and collision) premium by 15 percent or more if you simply increase your deductible from $200 to $500. If you can set aside the cash, consider a $1,000 deductible and save as much as 30%.

(BobSaid Financial tip: That $1,000, placed in a Money Market account which allows you to write checks, can save you many $1,000's in insurance premiums every year. It can be your go-to source for whatever deductible needs to be paid. That account will allow you to increase your deductible for all of your insurances - medical, homeowners, auto, etc. Just make sure that you replenish the account whenever you use it.)

DELETE COVERAGE -

* You may want to get rid of comprehensive and/or collision coverage on older cars. Remember, comp and collision is not a legal requirement and you buy it to repair damage to your own car. If it were only slightly damaged, would you actually file a claim to get it repaired? It doesn't make sense to spend the value of the car on this type of coverage every year.

* Doing without medical coverage is a good way to lower your premium if you have good health care insurance otherwise.

DISCOUNTS

Don't assume they will be offered. If you buy your auto insurance from the same company which provides your homeowners insurance they might make you a deal. Other discounts include:

  • Multiple vehicle
  • 3 years accident-free
  • 3 years moving violation-free
  • Low mileage
  • Anti-theft device
  • Automatic seatbelt /Air bag
  • Anti-lock brakes
  • Daytime running lights
  • Student driver with good grades
  • College student living away from home without a car
  • Long-time client
  • Driver over 50
  • Defensive driving course
  • Attending a Mature Driver Improvement (55 Alive) class.

After you have a complete list of discounts, ask again. Example - For a number of years, Mercury Insurance provided a discount for families that attended our Responsible Teen Driver seminar. Unfortunately, most brokers did not volunteer the information regarding this significant discount until the client had pushed to an extent that shouldn't have been necessary.

Step 3 - Shopping!!!

There are other sites, but most of them will take you to one of these. Once you have the best deal possible, check again every 2 years, if not more frequently.

Or, if you want to skip these and you live in California, Oregon or Canada, you can do what Bob did and call Wawanesa.

Insweb

Progressive

Geico

Allstate

Nationwide

21st Century

Mercury

If none of these want you because you driving record is so lousy, your only choice is probably the Assigned Risk Plan.