The best time to read your auto insurance policy? Before you have an accident.
Having an accident is bad enough. Finding out you don't have the right kind of insurance, or don't have what you thought you had, can make it much worse.
So read the fine print, even if it makes your eyes glaze over, and question anything that's either unclear or particularly important to you.
"Ask a lot of questions," says Jeanne Salvatore, senior vice president of public affairs for the Insurance Information Institute. "Make sure you understand what it is you're purchasing and how much."
Your goals:
- Get the most coverage for the lowest premium.
- Find a company that has a reputation for being financially strong.
- Find a consumer-friendly company.
Start shopping
First, shop carriers. Your insurance company will be evaluating what kind of customer you are. But what's their reputation? What have you heard from friends or relatives who've filed a claim? Does your state keep a record of complaints? Check with the office of consumer affairs or office of insurance."There's definitely an awful lot of information online to do some comparison shopping," says Alessandro Iuppa, president of the National Association of Insurance Commissioners and superintendent of insurance for Maine. To compare insurance policies and quotes, visit Insureme.com, a Bankrate company.
Check with your state insurance department to make sure the company you're ultimately going to deal with is licensed in the state in which you live. You can reach each of the states through the NAIC Web site at: www.naic.org.
If your state keeps information or logs complaints, what's the company's record? One good measure: the complaints ratio, says Iuppa. While it's not an exact science, if a company has a high complaint ratio, "it's a red flag," he says. If you're considering several companies and one has a high complaint ratio, it might push you toward one of the other choices.
Go with a company that has a good financial rating. Check how A.M. Best Co. ranks your company at www.ambest.com.