Shopping for Auto Insurance: 10 Things You Should Inquire About

1. Financial stability of the company - One thing that is rarely asked when a person looks for insurance is how financially fit the company is. In this age of federal bail outs and company bankruptcies, it is prudent to find out how long that they have been around? Who are their major financial backers? Or simply if this company admitted to do business in the state that you reside?

2. Where are they located, who do I contact for assistance? - It is nice to know where the insurance company has offices, since the only time you will probably ever talk to your insurance company is when they send you a bill, a question about your policy or file a claim. In the event that you need to contact your insurance company, are they available 24 hours? Or do you have to call early before work in order to accommodate their working hours? It should also be asked if the person selling you the insurance will be the person to contact or if they have a 24 hour call center to assist if that person is not available.

3. If I were to have a claim, who would handle the claim? - The primary reason most of us buy auto insurance is to protect our car. As a result, when you have an accident or your car is broken into, how smoothly and quickly will it be resolved? Is a claim is handled in house or is it handled by an outside company? This varies with each individual insurance company. Some will contract out portions of your claim, while others will handle the claim completely within.  As a result, it’s good to find out who will be helping you. Will you have a single point of contact or will you have to deal with several different people? This is usually helpful since most people prefer to deal with one person, not a call center where you might get contradicting information.

4. Does my insurance transfer to a rental car or a friend’s car if I borrow it? - This is a good thing to know because most, but not all insurance policies will cover you while you operate another vehicle. If your policy does cover you, it is also good to ask what your out of pocket expense would be if you are in an accident. This is usually your deductible although a few insurance companies classify rental losses in other ways and may have a greater or lesser expense to you the policy holder.

5. What type of coverage are you being offered? - One thing most people don’t understand is what each item on your policy covers. Each of coverage’s that you purchase is listed out separately on your declaration page. What does collision cover; what does comprehensive cover; what is umpd? These are good to know since most insurance policy declaration pages have a series of codes such as UMPD, UMBI, BI, COLL COMP, etc that many people do not understand.  Have the agent or sales representative clearly explain what each means and what your out of pocket expense will be to use your coverage.

6. How can I lower my rates? - This is where an agent or representative can really help you obtain discounted insurance. Ask about multi-policy discounts, student or trade association discounts, or simply ask what type of savings you can obtain by changing your coverage deductibles.

7. Does this policy include rental car coverage if I have a claim? - As a claims adjuster, one of the most common questions was, “Can I get a rental car?” What most people did not realize is that they did not purchase the additional coverage that would have the insurance company pay for their rental car when they are in a covered loss. Over the past years, the most consistent thing I have heard was that their agent or representative had informed them that they had complete coverage. As a result, they thought that their policy included coverage for the costs to obtain a rental vehicle. Rental coverage is a separate line item and typically is $20 to $40 per 6 months depending on the amount of coverage. It is one way that a great deal of sales agents or representatives will try to save you money on your premium by not including it. If this is your only vehicle and need it on a daily basis, I would advise buying it for about $30/$900 which is $30 per day coverage for up to 30 days. If you don’t need your car as often or have a 2nd vehicle this coverage may not be necessary, but it is good to assess the situation before making a decision.

8. What is my deductible? - A deductible is the out of pocket expense you will incur before the insurance company will pay out. Most deductibles are $250, 5$00, $750 or $1000. The deductible for auto insurance is per occurrence unlike most PPO or EPO health insurance which typically has a yearly deductible. One way to save money is to compare the price difference between each deductible level. Just be sure to weigh out the difference in price with the deductible to make sure that you are choosing a one that will suit your financial comfort level.

9. How much will it cost me to pay my premium in payments instead of all at once? - Most of us make our payments over the course of the policy; what most people don’t realize is that each payment typically has a fee added onto it. If you make payments, find out what the cost of paying over time is compared to paying in full. If you are able to, you can avoid the fee you can pay the policy in full at the time of issuance.

10. Is there an agent or broker fee for helping me obtain the policy? - This varies depending on the agent and or brokerage. Some charge fees for helping you get a policy with an insurance company that they represent. It is nice to ask about this fee before you pay it since it adds to your policy cost. Lastly, you want to find out if this is a one-time fee or something that will be charged annually, or when ever you contact them.