Saving money on your auto insurance can be as simple as doing a little online legwork.
According to research from Edmunds.com, the auto research site, many people buy their car insurance by calling the number on the screen at the end of a TV commercial. "Maybe waiting for a solution to be beamed into your living room is not the best idea," says Phillip Reed, senior consumer advice editor at Edmunds.com.
But how do you sort through the conflicting claims to find the best value?
First, establish how much coverage you need. Most states mandate minimum amounts of accident coverage for bodily injury liability for a single person, bodily injury liability for all injured parties and property damage liability. They range from $10,000/$20,000/$10,000 in Florida to as much as $50,000/$100,000/$25,000 in Alaska, according to Edmunds.com.
Your state's minimum is a starting point, but coverage should be based on the value of your assets and how far you want to go in protecting them, according to Edmunds.com. Those assets could become a litigation target if your car insurance coverage is less than the other party's expenses in an accident where you were at fault.
"With the cost of medical expenses and vehicle repair costs today, the state minimums just aren't enough," says Bill Pearse, vice president of auto product, strategy and design for Hartford, Conn.-based Travelers Insurance.
Conversely, there is no reason to pay for more insurance than you need. If you don't have assets to protect, you may opt for less coverage and lower premiums, according to Edmunds.com. Or if your vehicle is older and paid for, you might consider dropping your collision coverage, which covers damage to your car when it hits, or is hit by, another vehicle.
To begin your shopping, Reed suggests using an online insurance quote sites such as Insureme.com to compare premiums. Cost savings can amount to hundreds of dollars.
However, your purchase decision shouldn't be based solely on price, says Pearse. "You should look for a financially stable company," he says. "Make sure you are with an A-rated carrier."
Insureme.com, a Bankrate company, offers summaries of the main car insurance companies that include each company's Standard and Poor's rating. It is meant to rate a company's financial capacity to meet its insurance obligations. S&P's rating system has 10 descending categories beginning with the top-rated AAA score.
You can also look to friends, relatives and neighbors for feedback about experiences with service and accessibility. "You need to understand the claim effectiveness of your carrier," Pearse says. "What has its history been?"
Finally, Pearse says consumers need to be sure they are getting every credit and discount for which they qualify. These vary according to the carrier and state where you live. They could include a multi-vehicle credit, mature-driver discount and antilock-brake credit, among others. Ask the carrier's agent for a complete list.
According to Pearse, bundling policies with a single carrier can often save money, too. For example, Travelers Insurance gives an average 10 percent break on auto insurance policies and a 25 percent discount on homeowners policies for customers who insure both.
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