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Insurance companies provide the financial buffer we need when we are involved in a car accident. A good insurance policy can save an at fault driver hundreds of thousands of dollars in medical costs alone. But, a poorly researched insurance company can be a headache when a driver needs to file a claim. Not all insurance companies are alike, of course, and it’s prudent for anyone seeking auto insurance to prepare himself ahead of time for some of the tactics used by unscrupulous companies. A savvy consumer will consider the following information when looking for car insurance.

Understand the Language

Insurance is a tricky business, especially if you don’t understand the terms being thrown around. So, prior to researching insurance companies and coverage, school yourself on the types of insurance you should consider, and what said insurance covers. Whether or not you should add certain types of insurance will depend on factors, including your car’s value (can you afford to replace your car?), and whether or not your car is paid off. Deductibles and caps apply to all, but typical types of auto insurance include the following:

  • Comprehensive: This insurance covers your car for damage due to non-accident scenarios. For example, acts of nature, theft, and fire.
  • Collision: Regardless of who was at fault, collision insurance will pay for the damage to your car.
  • Personal Injury Protection: As the name suggests, personal injury protection insurance takes care of your medical bills (and those of your passengers) should you be involved in an accident.
  • Uninsured and Underinsured Motorist Protection: Some states require this type of insurance, which covers repair costs on your vehicle if you are hit by an uninsured or underinsured driver.

Understand Your Risk Assessment

Insurance rates are calculated, in part, based on how ‘risky’ you are to the company. Data, such as your age, credit rating, driving record, sex, and criminal record can be used to determine how much you will pay for insurance. As an example, teen and elderly drivers usually pay higher rates. If you receive a quote that you feel is unfair, ask the agent to explain how they calculated your risk assessment.

How Do They Assess a Vehicle’s Value?

Prior to signing on with an insurance company, ask the agent about the process they use to assess a vehicle’s value. Traditional resources, such Kelly Blue Book and Edmunds are just the starting point for insurers. The company may utilize other information at their disposal, including average vehicle value in your area and selected quotes from vendors. In fact, according to Belt & Bruner PC, insurance companies even use valuations in lower cost areas that are close to you. For example, if you live in a city, the company might seek pricing information from a neighboring suburb. Insurance companies use these tactics to find the lowest quotes for your vehicle. That way, they are able to pay out less.

Finally, in any conversation you have with prospective insurance companies, maintain a written record of the information you are told. Also, keep a copy of any literature given to you by the agent. File all of the information, so that if you do end up signing up for auto insurance with the company and need to file a claim, you can review your records and documents to be sure that your agent is providing you everything you were told you would get. Insurance companies are in the business of making money, but they are also there to protect their clients. By approaching your search for car insurance as a savvy consumer, you will be able to find a company that puts the needs of their customers first.


Staff (65 Posts)