Finding Accurate Auto Insurance Quotes

Driving is a privilege in the United States that requires drivers to buy a mandated minimum amount of auto insurance. While the required amount and form of auto insurance varies from state to state, it can be prohibitively expensive. So if you want to get the best protection at the lowest possible price, you must invest some time in finding the best insurance companies and understanding the terms and conditions of their various offers.

Click here now to start researching auto insurance quotes by entering your ZIP into the FREE search box!

According to Forbes, auto insurance premiums have been rising, much like the cost of other goods and services. Between 2008 and 2010, motor vehicle insurance cost rose by 10%, on average. And that trend appears to be here to stay.

Auto insurance companies blame the rise on the increasing cost of tires, auto parts and other related services. Given the intricacies of the auto insurance industry’s calculations, it is important to understand how they work.

What is Auto Insurance?

According to the Insurance Institute of Highway Safety traffic rules and coverage rules vary from state to state.

However, all states require its drivers to have a minimum amount of insurance or proof of financial wherewithal that will allow them to pay for damages in case of an accident.

Basically, auto insurance is meant to protect the driver and his or her family from massive financial losses in case of an accident. It is a legal understanding between the driver and the insurance company. In return for paying a set premium amount, the signatory insurance company is expected to pay for property, liability and medical coverage as stated in your policy.

Auto insurance policies offer many forms of coverage, not all of them mandatory. Most auto insurance policies are usually six-month or yearlong policies, and need to be renewed at the end of term. Your insurance company is required to send you a renewal notice.

In some cases, your auto insurance bill can be paid in monthly installments. This is usually accompanied by an additional service charge and ends up being more expensive in the longer run.

Different Forms of Auto Insurance

Drivers need some form of insurance to protect themselves and their families in case of an accident. While the Insurance Information Institute states that almost all states require drivers to have minimum state mandated auto insurance or proven ability to pay for all damages, including medical bills, the auto insurance provides many added forms of protection.

The main forms of auto insurance are as follows:

• Liability insurance: Mandatory in most states, liability insurance protects the driver in case he or she is responsible for an accident. It pays for all related damages: property and medical. It covers damage to the other vehicles involved in the accident as well as damage to public and private property including lampposts, fences, and homes, among others. It also pays for treating injuries caused by the accident as well as funeral costs in case of a death.
• Medical or personal injury protection (PIP): This covers all medical costs incurred in treating injuries to the driver at-fault, and his or her passengers.
• Comprehensive insurance: As the name suggests, this form of coverage protects the driver from paying for any damages caused to your car by non-crash related damages. From a falling piano to theft and vandalism, it covers any damage or destruction to your car. It also covers Acts of God such as floods, tsunamis, volcanoes, snowstorms, hurricanes, tornadoes, and earthquakes. However, you should read the fine print carefully. In some cases, insurance companies have ruled that while a hurricane or a tornado are Acts of God, driving during either and having the door blow away is a human mistake. Therefore such damages might not be covered.
• Collision insurance: This covers all collision-related damages to your car. Irrespective of fault, if your car is damaged beyond repair, your insurance company will give you the market value of the car. Collision insurance is required if you have financed your car and is highly recommended if you are driving an expensive vehicle.
• Uninsured or underinsured motorist protection (U/UI): U/UI motorist protection covers you in case you are involved in an accident with another party that has limited or no insurance. Even if you are not at fault, in cases such as this, without U/UI protection, you are left holding the bag. According to an article in USA Today, one is seven drivers are uninsured today. In 2007, this left insured drivers paying $10.8 billion for those without insurance. Such high numbers make it imperative to get U/UI protection.
• GAP insurance: If you are making car payments on a car that is worth less than its original price, GAP insurance becomes essential. If you total the car this coverage will pay for the remaining loan.
• Rental car insurance: If you do not own a car and are renting one, you will need rental car coverage to protect you from any liability, in case you cause an accident. Most car owners with their own insurance should be covered but if you are traveling out of the country, it might be a good idea to get additional rental insurance.
• Mechanical breakdown insurance: This form of insurance is meant to cover you if your car has a mechanical breakdown. Depending on the kind of coverage you get, this insurance can cover a plethora of parts and systems of the car.

Steps to Finding Accurate Auto Insurance Quotes

When you go into the insurance marketplace, you will get a plethora of insurance quotes. But you have to understand the fine print to be able to get the exact fit of insurance that is needed to protect you and your family.

In today’s world of limited budget and shrinking services, you need to make strategic moves to get the best for your money. So take the following steps and it will help you save some money.

Before seeking quotes, make sure you understand your needs. Narrow your main requirements and match them to the various forms of auto insurance available. Once you have decided which forms of insurance you need, settle on the maximum you are willing to spend to get them.

Make a list of discounts available on the market. Make a notation to ask each company you contact about their available discounts or any specials they are running.

To make your calls or get quotes from online companies, you will need all the license numbers of the drivers in your household who need insurance, the vehicle identification number (VIN) for each car they drive, their driving and claims records for the past five years, the declaration page from your current policy, and total mileage on each car.

Once you have all this information in place, you will be able to get a range of auto insurance quotes, from a variety of insurance companies.

Factors That Impact Insurance Quotes

Each company has its own formula for calculating its insurance premiums. While some companies focus on average adult drivers, others specialize in teen drivers or high-risk drivers. Irrespective of their target consumer group, insurance companies use the following markers to crunch their numbers.

• Driving record: A driving record without speeding tickets, points or citations indicate low risk for insurance companies, which translates into lower insurance quotes.
• Claims record: A clean claims record indicates a careful driver, which in turn means lesser insurance cost.
• Vehicle: The kind of car you drive can make a huge difference to your premium. For instance, according to AOL Autos, certain cars such as souped-up muscle cars and sporty convertibles are more expensive to insure. In other words, year, make, model, color, safety features of the car, and Insurance Institute for Highway Safety crash test results all make a difference to insurance premiums.
• Miles driven: If you drive more than the average number of miles per year, your premium rates are likely to be higher. Since you are driving more, insurance companies raise your risk factor given a higher possibility of accidents.
• Location: Your location makes a huge difference to your insurance rates. Urban areas have higher insurance rates than thinly populated rural areas or slow speed limit residential areas. Similarly certain geographies are more prone to Acts of God such as hurricanes, tornadoes or earthquakes. This raises premium rates substantially. If you live in a crime-prone neighborhood, your premium will be higher since insurance companies will assume higher risk of theft and vandalism.
• Demographics: Insurance companies also zero in on age, sex, education, profession, and marital status for their calculations. Drivers below the age of 25 and senior citizens are considered riskier drivers, and have higher rates of insurance. Women pay lesser than men do and married people pay less than singles. Certain professions such as doctors, engineers, and teachers pay lesser since statistically they are shown to be better drivers. Similarly, people with college degrees have lower rates.
• Credit rating: According to MyFICO, credit scores are a marker of financial responsibility or lack thereof. Insurance companies routinely use your FICO scores to determine if you are likely to pay your insurance premiums on time.

Buying Auto Insurance

The Internet is an unending source of insurance information and quotes. You can get a range of protections from a variety of companies. Just make sure you research the companies well in terms of their claim repayment history, customer service and financial wherewithal. One outstanding resource is A.M. Best, which will be able to give you detailed financial reports on the companies you are scrutinizing.

If you are looking for a comprehensive list of accurate auto insurance quotes, type your ZIP code into the search box on this page to receive multiple offers, discounts and all!