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How to compare car insurance plans

by Penina

If you want to save money on car insurance an important first step is to compare car insurance plans. Shopping for car insurance seems like it would be easy, but it actually can be quite complicated. Comparing one quote with another requires careful understanding of what is being offered and what the various coverage options mean. Without doing this proper homework, those shopping for these products can end up with something that is not a good fit for their needs.

Compare car insurance by getting detailed documentation

Detailed documentation accompanying quotes will help the buyer make the right decision and save money on car insurance. Comparing not only what coverage is offered but also what limits and maximums are on the plan is a vital part of this comparison process. The only way to truly compare one product to the next is to have a document to compare side by side.

Look at the big picture when you compare car insurance

Not all policies cover the same thing. In order to compare car insurance quotes, as pointed out by How Stuff Works, the shopper must understand the various types of coverage and what they mean. Here are some common coverage options:

  • Liability – This is the bare bones coverage that 47 out of 50 states require drivers to have. It covers damage to others and their property, but not injury to the driver who carries the coverage, nor the policy holder’s car.
  • Collision – This coverage is for the policy holder’s vehicle when in a crash.
  • Comprehensive – This coverage covers other damage to the vehicle that occurs for a reason other than an auto accident, such as damage from vandalism or weather events.
  • Medical – Pays any medical expenses resulting form a crash, no matter who is “at fault.”
  • Personal Injury Protection (PIP) –Pays medical costs for the insured driver, even if the driver is at fault.
  • Uninsured Motorist Protection – Pays the insured’s expenses if in an accident that is the fault of a drive who carries no coverage.
  • Rental Reimbursement – Pays for a rental car if the policy holder’s car is damaged due to an auto accident and has to be fixed or replaced.

Knowing these various coverage options helps the shopper make informed decisions and save money on car insurance. A policy with a dirt-cheap quote often leaves out important coverage, like uninsured motorist coverage, as James Burrows of eHow warns, and this may not always be obvious in the quote. Comparing “apples to apples” when shopping for this type of coverage is vital.

Consider limits

Limits are another item to consider when shopping for this coverage. Insurers can play with the limits in order to offer lower premiums, but this can be a problem if the purchaser needs to use the policy. In a serious car crash requiring a lengthy hospital stay, a $100,000 medical bill limit could be used up quite quickly. In this case, the higher premium for a policy with a $500,000 limit would be much more worthwhile. Since those shopping for these products cannot predict their future use of their coverage, they need to strike a balance between affordable premiums and reasonable limits.

Consider the cost of the car

Another factor that impacts the quotes a buyer receives from various coverage providers is the make, model and year of the car. The more expensive a car is to fix, the more expensive it will be to insure according to Cars Direct. Also, cars with a lot of horsepower will cost more to insure because the insurers will assume that the driver will try to use all of those horses when driving. Alternately, the quintessential “family car” is going to save money on insurance, because it stands to reason that a parent is going to drive more cautiously with kids in the car and not get into accidents.
Driving without sufficient coverage is almost as dangerous as driving uninsured. If you would like to save money on car insurance, it’s important to compare car insurance by talking to many carriers before purchasing this particular product in order to get a sufficient number of quotes to compare.

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