How To Shop For Car Insurance


How To Shop For Car Insurance

One of the best benefits of taking Texas adult online drivers education training is the discount you get on car insurance.

However, though important, cost is not the only factor in choosing an insurance policy, especially for newer drivers. Insurance policies can be complicated and therefore difficult to understand.

So we have put together a basic guide so you can understand what to look for when purchasing insurance.VIDEO: How Much Car Insurance Do You Need?

Important Insurance Terms

Before purchasing an insurance policy, it is important you first familiarize yourself with common insurance terminology. These are the five most important insurance terms:

  • Policy: An insurance policy is the contract you have with your insurance company. The policy outlines the specific perils covered by the insurance company and the cost to the insured. When you get insurance, you will negotiate the policy and then get a copy once you have settled upon agreed coverages and price.

  • Deductible: The deductible is an agreed upon amount that the insured will pay before the insurance company will pay the claim. Typically the higher the deductible the lower the cost of the insurance policy. However, a high deductible means when the insured makes a claim, the claim must be lower than the value of the deductible and the insurance company will deduct the deductible from the pay out.

  • Exclusion: Exclusions are the specific perils the insurance company with not cover. Exclusions are used as a measure during a claim and will be clearly stated during the negotiation of the policy.

  • Premium: The premium is how much the insured has to pay to receive the insurance policy. The premium is the total value of the insurance policy and varies depending on the stipulations of the policy.

  • Claim: An insurance claim is a request for the insurance company to pay the insured. Claims are then investigated and if legitimate, paid out to the insured. In the case of car insurance you will make a claim if you are in an accident or have experienced property damage to your vehicle.

Types Of Coverages

Insurance policies have a variety of different types of coverages. The required coverages depend on the laws of individual states and the specifics of the driver. The most standard types of car insurance coverages are:

  • Auto Liability: Most states require a minimum of auto liability. Auto liability covers damages to another person or their property from an accident that is the fault of the driver.

  • Uninsured Motorist: Uninsured motorist insurance will cover any damages to you, your passengers, or your vehicle if you have been hit by a driver that does not have auto insurance.

  • Underinsured Motorist: Underinsured motorist insurance will cover any damages to you, your passengers, or your vehicle if you have been hit by a driver that does not have adequate insurance to cover all the expenses.

  • Personal Injury Protection (PIP): PIP is mandatory in many states and is a form of car insurance that specifically covers medical expenses and any other costs including physical therapy and lost wages associated with an injury incurred during an accident. PIP coverage is no fault and will cover everyone in your vehicle.

  • Medical Payment (MedPay): Medical payment insurance is very similar to PIP as it covers medical expenses in the case of an accident. However it does not provide for lost wages.

  • Comprehensive: Comprehensive is a type of physical damage insurance, often referred to as “full coverage”. Comprehensive covers any property damage to your vehicle as a result of anything other than a collision. Acts of God and crime are covered by comprehensive insurance.

  • Collision: Collision is also a type of “full coverage,” physical damage insurance. Collision covers any cost associated with a collision with either another vehicle or a fixed object.

VIDEO: What Is FULL COVERAGE Auto Insurance?

There are also many add-on, premium auto coverages including:

  • Emergency Roadside Assistance: A type of coverage that provides assistance if yuo run into any trouble on the road.

  • Mechanical Breakdown Insurance: Your insurance company will cover the cost of any mechanical repairs.

  • Rental Reimbursement: If you car is being repaired during a claim, your insurance company will provide you with a rental as part of the policy.

  • Guaranteed Auto Protection: Covers the value of the loan or lease on your car, rather than the cash value of your car.

  • Nonowned Liability: Provides auto liability when you are driving a car you do not own.

VIDEO: Types Of Auto Insurance

Steps To Purchase Car Insurance

Once you have familiarized yourself with the terminology and available coverages, it is time to shop for car insurance.

  • First you want to research what reputable insurance companies provide coverage in your area.
  • Second, you want to determine what coverages you want and what kind of budget you have.
  • Third, you will need to prepare documents such as your driver’s license and driving record, your vehicle’s information such as year, make, model, and vin number, and any information on past coverages, including former claims.
  • Then you want to contact 3-5 insurance companies and begin negotiating a quote with an underwriter. Fortunately, you can do most of this online and many websites will let you compare multiple quotes.
  • Decide which quote is the best and contact the underwriter to begin the process of drafting a policy.
  • Once you have your policy, you will need to keep a copy for your records. You will also receive insurance cards and you will keep one in your glove compartment and one in your wallet at all times.

Shopping for car insurance can be very intimidating, especially since policies can be confusing.

However if you use this guide to familiarize yourself with the terminology, types of coverages, and the process for purchasing car insurance, shopping for car insurance will be much easier.