Buying insurance isn’t like it used to be. You no longer need to sit and listen to the insurance agent’s pitch as he drones on for hours. You can just go and get a quick and instant online insurance quote in no time.
Still, if you’re going to be diligent about it, there are some specific questions you ought to ask before you sign on the (virtual) dotted line:
- Is my auto insurance company licensed to sell insurance in this state? The National Association of Insurance Commissioners maintains a list of companies in violation of state insurance licensure laws.
- How much insurance am I required to buy? Drivers are required to buy auto insurance in most states, and each state sets its own minimum requirements. Find out what your state requires, then make sure your coverage meets the minimum.
- What will my policy cover? What isn’t covered? Most auto insurance policies will cover damage to someone else’s property if you cause an accident, but what about your own vehicle? Be sure you understand the basic terms and definitions and review your policy carefully.
- What kind of coverage do I need above the minimum state requirements? State laws only define how much coverage you need to be street legal, not how much coverage you might need in an accident. If you have an expensive car or need foreign parts, repairing the damages after an accident could cost much more than minimum coverage will provide.
- Do I need comprehensive and collision coverage? Depending on the age and cost of your vehicle, you may not need collision. If your car is worth a lot of money, or you are still paying it off, collision may be advisable – even required by your lender.
- Are there any discounts I could qualify for? Many auto insurance companies provide discounts for good drivers, good students, customer loyalty, and defensive driving classes. You may also qualify for a discount if you have certain safety features on your car, like daytime running lights, anti-lock brakes, and an anti-theft system.
- How much uninsured/underinsured motorist coverage do I need, and what’s the deductible? Uninsured drivers can wreak havoc when they cause accidents. Since they often have few financial resources of their own, you’ll need to make sure your family is protected.
- If I’m in an accident that wasn’t my fault, how will that affect my premium? While some companies are offering accident forgiveness, others also offer rebates and discounts when a customer goes for a certain period, such as 6 months, without an accident. Ask your agent how accidents will affect your rates.
- What if I’m in an accident, and it was my fault? Most insurers will raise your premiums if you cause a crash. Be sure to ask your agent how your company handles these rate increases.
- Can I use my own repair shop? Many insurance companies will cover the costs of repairs at any reputable mechanic and/or body shop. Others will require you to select from a list of their preferred vendors.
It’s not too early to ask these questions now. Be sure you know what will happen down the road.
