How to Choose Car Insurance can be overwhelming. Because there are so many companies selling car insurance, sorting through all the choices to find the right policy for you and your family can be a challenging task. With each carrier claiming to offer the best value, it’s easy to feel confused. At first glance, all of the policies may look the same, but there are important differences you may need to consider. Your goal should be to find one that includes all the benefits you need at a competitive price. After reading this article and you are looking for car insurance in Lancaster SC, set up an appointment with our local agents and let’s find the policy that right for you.
Follow these four steps for finding the best car insurance policy for you:
Determine the Level of Coverage You Need
The cheapest policy may not be the one you need. Inexpensive plans may not provide collision coverage, which pays to fix your own car following an accident. They may not offer comprehensive coverage, which covers damage to your car not caused by auto accidents, such as natural disasters, theft or vandalism.
The nonprofit Insurance Information Institute notes that all states except New Hampshire require property and bodily injury liability coverage1. A policy that offers only the minimum amount of liability protection required by law may save you money, but it probably won’t cover the legal claims that can stem from serious accidents involving property damage or injuries. The old saying, “you get what you pay for”, comes into play here.
For example, in SC, the state minimum limits are $25,000 / $50,000 /$25,00. That’s $25,000 bodily injury per accident, capped at $50,000 combined personal injury per accident and $25,000 for all property damage per accident. If you hit a truck ($70,000) pulling a camper ($50,000) and have 4 people injured in the wreck ($100,000 hospital bill), you see your policy with the state minimums falls way short. Where does the extra liability costs come from?
Review the Financial Health of Car Insurers
Everyone wants a good deal on their auto insurance policy, but low rates won’t do you any good if the company you choose isn’t around to pay its claims. Online reports from independent ratings companies, such as A.M. Best, Fitch, Moody’s and Standard & Poor’s, can help you determine your insurer’s financial health, says Investopedia2.
Each ratings agency uses its own standards for evaluating insurance companies and their financial health. That’s why it’s always best to stay with a carrier who has been around a long time and has a strong credit rating.
Compare Several Car Insurance Quotes
You can shop for insurance by going online, using the telephone or working directly with your local insurance agents, like HFC Insurance. A report by Bankrate says getting multiple quotes is important because prices for the same level of coverage vary greatly.3 Insurance prices are based on risk and claims exposure for that carrier.
Some insurers rely heavily on insurance scores to determine how likely policyholders are to file claims. One area they may look at is your credit score. Other companies may give more weight to the type of car you drive and how expensive it would be to repair following an accident.
Where you live also can be a factor in determining what you pay for car insurance. If your ZIP code has a higher-than-average rate of car accidents, your insurance costs could be higher.
Ask About Discounts
Many insurance companies offer discounts. One big factor to help you decide on how to choose car insurance is to go with a carrier that will give your teen with good grades a reduced insurance rate. Some insurers offer discounts to drivers who meet annual low-mileage thresholds, insure multiple vehicles or take driver education classes. If your car has an anti-theft device, that also could qualify you for a discount. Most carriers today offer a mobile app or plug-in device to monitor your driving habits in order to receive an additional discount.
As you see, the stress of how to choose car insurance can be lessened. Be sure to request a list of all available discounts. It could make a big difference in how much you pay for your policy. Checkout our additional information on auto insurance on our Auto Insurance Resources page.
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Sources:
1 http://www.iii.org/article/auto-insurance-basics-understanding-your-coverage
2 http://www.investopedia.com/terms/i/insurance-company-credit-rating.asp
3 http://www.bankrate.com/finance/insurance/tips-for-getting-car-insurance-quotes.aspx