A Short Guide To Auto Insurance Quotes And The Covers They Offer

The process of buying insurance is streamlined and simplified into three steps:

  • You supply details of who you are, where you live, and what you drive to insurance companies;
  • By return, the insurers send out auto insurance quotes;
  • You compare the quotes and decide whether an insurer offers the deal with the best value for money.

What exactly is included in a quote?

The contents fall into a consistent pattern, but the order of the elements may vary. There’s:

  1. A summary of the information you supplied — you should always check this is accurate — if there are mistakes, you should start the application again;
  2. Confirmation of the cover you asked for:
  3. A breakdown of how the annual premium rate has been calculated:
  4. Confirmation of the discounts, if any;
  5. A statement of the annual premium rate you will have to pay for the cover described.

What types of cover are offered?

If you live in a no-fault state, the quote will be based on your local financial responsibility law. And will require you to buy insurance to cover all of the costs of treating your injuries and repairing the damage your property has sustained.

If you live in an at-fault state, the mandatory minimum is always liability coverage against claims made against you by those you have injured.

If you drive an older vehicle and have no personal assets, you may think the mandatory minimum will be sufficient.

However, if you have an auto loan or personal assets at risk if a claim against you succeeds, it’s advisable to buy more than the minimum liability coverage. 

Meanwhile, you will also want to buy collision and comprehensive cover to pay for your medical treatment and the repair or replacement of your vehicle.

Whether you choose to add additional coverage is a balance between what you think you need and what you can afford.

Most people buy cover for the cost of towing the vehicle from the scene of an accident and renting a replacement while repairs are carried out.

Once you have compared all the auto insurance quotes, you should have a good idea of what annual premium rates offer exceptional value for each of the main types of insurance. Only then can you make the best decision.

Key questions to consider when choosing auto insurance

Everything starts from the underlying legal reality. Each state has a financial responsibility law laying down the conditions to fulfill before you can drive on a public road.

If you do not comply with your state’s law, you will commit a criminal offense. Now here come the key questions:

Which cover should you buy?

In at-fault states, the question is whether to stay with the mandatory minimum liability coverage or buy additional cover.

This is down to your personal circumstances and your appetite for risk. If you believe you are lucky and will not be involved in an accident, you buy the minimum with the maximum possible deductible; this is really cheap auto insurance.

But if you believe you are at risk or you have taken an auto loan, you will add collision and comprehensive to protect yourself and your assets against claims.

And there are often high costs of repairing or replacing your vehicle. In a no-fault state, the question is always how much cover to buy?

How much cover to buy

If you ask an insurance agent, he will always tell you how many things can go wrong, how much these things cost to put right, and so how much insurance you should buy.

Since agents live by commission, you will be encouraged to buy the maximum. In the end, it all comes down to a simple, practical test.

For medical treatment, do you have adequate health insurance or Personal Injury Protection? For repairs to property, do you have enough cash and cover to repair or replace what you have lost?

If the answers are positive, you look for the lowest auto insurance quotes. If the answers are negative, you look for the affordable quotes for the amount of cover you think you need.

How do you keep the annual premium rate low?

This is minimizing the cover and maximizing the discounts as well. You begin by shopping around. Then compare all the auto insurance quotes to see what rates are being offered.

Then check to see whether you have been given all the discounts you are entitled to receive. Sadly, not all insurers offer you all the discounts by default.

It’s wise to check the quotes carefully and, if any discounts are missing, pick up the telephone and ask whether the savings can be passed on to you.