Understand How To Compare Auto Insurance Quotes

So you've decide to try to save money by shopping around for auto insurance. You've received several quotes; now what? The following are tips to help you compare auto insurance and determine how much auto insurance you need.

Compare Coverage Types
When you compare auto insurance possibilities, it is important to compare the types of coverage included in the quotes. This is the type of insurance included, such as liability, medical payments, uninsured motorist, collision and other-than-collision (or comprehensive). If one quote seems much cheaper than the others, it may not include one or more of the types of coverage listed above.

Compare Coverage Limits
This is where you must study the numbers to ensure an apples-to-apples comparison. Most types of auto insurance contain limits-maximum dollar amounts payable for that type of coverage under the policy. When reviewing policy limits, be sure to note how they are applied. For example, some auto policies may show split limits of liability (i.e., 25/50/25). In this case, if you cause an accident: $25,000 is the maximum payable under the policy for bodily injury to a single person; $50,000 is the maximum payable under the policy for bodily injury to all persons in the accident; $25,000 is the maximum payable under the policy for property damage per accident. Compare auto insurance to ensure that the coverage limits are the same on each quote. If not, consider choosing the policy with the highest limits.

Consider Higher Limits
Many states require drivers to carry at least minimum limits of liability, personal injury protection and/or uninsured motorist coverage. Most auto insurance companies will offer limits higher than the required minimums.

When deciding which limits to carry, consider the following question: Do you know what type of accident you are going to get into? Of course not! The unpredictability of accidents is why higher coverage limits are always recommended when you compare auto insurance policies.

Consider Loss of Use
Most lenders will require collision and other-than-collision (collectively called "physical damage") coverage on your vehicle(s). If you own your vehicle outright (no bank loan) and are deciding whether to purchase this coverage, consider the cost of not having access to your vehicle for a period of time. Physical damage coverage will usually cover the cost to repair or replace your damaged vehicle in addition to reimbursement for the cost of a rental or replacement.

If you decide to forgo this coverage in exchange for premium savings, be sure to compare the savings with the cost of losing the use of your car. And, most importantly, be sure to compare auto insurance policies in detail before making a decision on price alone.