Buying car insurance can be frustrating, time consuming and confusing. But you can save yourself some time, frustration and confusion if you will avoid these five things when shopping for car insurance.
1. Low Deductibles
When you choose low deductibles, the insurance company charges you the highest premium. That’s because they are carrying most of the risk. The wise choice on Collision and Comprehensive (other than Collision) coverage is to take the highest deductible your budget could stand. If you already have a $500 deductible, consider a $1,000 deductible. You’ll save a bunch of money on premium.
2. Low Liability Limits
There are some car insurance companies out there that pride themselves on selling policies that are meet the state minimum requirements…just enough coverage to make you a legal driver in your state. I grudgingly admit that state minimum coverage is far better than having no coverage at all. However, most drivers have lives, assets and incomes that require better protection. If you injure another person in an accident, and they get a jury award of $250,000, and you only have $50,000 coverage…your finances are ruined a long time into your future. Choose very high limits…$250,000 or higher. The coverage is inexpensive. You’ll NEVER be sorry.
3. Phone quotes
You need to get your car insurance quote IN WRITING. Why? Because you need to know exactly what is covered, the coverage limits and the deductibles. Getting quotes over the phone is convenient, but you need to have the agent follow up by sending you the written quote by mail, fax or email. NEVER buy car insurance based upon only a phone quote.
4. Inexperienced Agents
I wrote an article entitled “Insurance Agents: Does Yours Measure Up?” In that article, I give all the criteria you should use to evaluate your insurance agent. But for this article, let me give you three recommendations:
• Interview EVERY insurance agent to find out their level of expertise. Only do business with the most qualified, educated and experienced agents. Let the inexperienced agents practice on people who don’t care about protecting themselves the right ways.
• Don’t always chase after the lowest premium. You get what you pay for. You’d be better served to pay a higher premium if a highly qualified agent takes care of you. You don’t drive the cheapest car you can find, do you?
• Never be hesitant to call the Department of Insurance of your state if you have problems with your agent. Agents are regulated for a reason.
5. Companies that get lots of complaints.
I recently wrote an article about the Top Ten Companies who get the LEAST amount of complaints with the New York Department of Insurance (DOI). You can read that article which is also posted at this website. These are companies that get complaints at the DOI.
The three most common complaints are:
1. Monetary settlements – settlement amount is too low.
2. Policy terminations
3. Promptness of insurance claim payments
They are: (in order, least complaints top, higher number as you descend)
1. Mercury General Group
2. American Express, Amex Assurance, IDS Property Casualty
3. Eveready Insurance Co.
4. Electric Insurance Group
5. Amica Mutual
6. Preferred Mutual Insurance Co.
7. United Services Automobile Assurance Group (USAA)
9. Utica Mutual
10. State Farm
My recommendation is that you should never do business with ANY company that ranks below the top ten in number of complaints about their service.
If you will avoid these five things, you stand a very good chance of buying the right insurance at the right price. Take control of your insurance!
If you are one of the unfortunate people who experience a car wreck, you’ll need to know how to handle your insurance claim so that you maximize your recovery. You will need to know how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, check out my website at:
Copyright 2008, Russell D. Longcore.