What Is Car Insurance?

Is there anything more confusing than shopping for car insurance? How can all those claims on TV that go “At ABC insurance our insureds save $400 over insurance with XYZ company” when XYZ company is making the same claim about ABC. Who’s fudging who?

Car insurance can be really complex and that’s how those commercials get away with their claims. The fact of the matter is each company will have a class of insured who has elected specific coverages that will be cheaper than another company. Nobody is comparing apples to apples and that’s not doing the consumer any favors.

The best thing a consumer can do to get the best deal on car insurance is to understand just what it is and what drives the cost. Armed with this information you can go shopping and compare apples and apples to find out who actually does have the best deal.

With that thought in mind consider the following:

For starters find out what your state requires for minimum coverage. This will vary from state to state as will the penalties for driving without insurance. In fact if you are an uninsured driver in California and you are hit by another vehicle, because you are uninsured you can not file a claim or sue for other than actual economic loss. That means no claim can be made for pain and suffering.

Liability coverage. This is the element of car insurance that most states require you to have. This insurance pays third parties for damage you cause to either property r persons. This coverage comes in a wide range of coverage levels each with a different cost.

Collision insurance. If you are involved in an accident and you are at fault, your collision coverage can be used to repair your car. Collision will come with a deductable. If you are a good driver you can choose the deductable yourself. If you are a high risk, the insurance may only offer you a higher deductable. Generally speaking, the higher the deductable (the amount you pay for the repairs) the lower the premium for the coverage.

Medical payments. This coverage pays out medical expenses for anyone inside your vehicle (including yourself) if they are injured as a result of an accident regardless whose fault it is.

Comprehensive coverage. Companies will package this differently but basically it is a fire and theft coverage. Depending on how the policy is written it will cover not only the theft of your car but items stolen out of the interior and the trunk.

What to do next

Now you know the basics of car insurance and you can start doing some informed comparison shopping. But just where do you start? Do you call up every company’s agent and ask for a quote? Even if you go to an insurance broker he or she is only going to represent a few different companies. So where can you go.

Actually the medical insurance industry was the first to revolutionize the way people shop for insurance when they created online health insurance quotes. The auto insurance people weren’t far behind and now there are massive brokers that offer free car insurance quotes online. Without question shopping for car insurance online gives you access to the most companies and of course saves an incredible amount of time.

Secure internet insurance sites

The insurance sites are secure and can get you quotes for comparison based on your exact specifications…no TV ads here. The most time consuming part of this process is entering the coverages that you want and submitting your driving experience. But you only have to do this once rather than doing it for each company.

What’s more is you can adjust the coverage levels after you have received you firs quotes for cost comparison to see how it impacts your cost. Shopping for car insurance is not fun but it has become faster and more effective thanks to the internet.

Author Bio

Laura Penekamp is a stay at home mom who loves to freelance articles. When she’s not busy with her three children Laura spends her time writing about all the ways a family can save money online.