How To Compare Car Insurance Rates

June 15, 2010

The steps involved in comparing car insurance quotes may sound simple, but each year, thousands of Americans end up paying too much for car insurance because they dont understand what each coverage means or they simply pick the car insurance company with the best ads. It's tough to tell if you have the best deal if you only contact one insurance company or you're not too sure what your coverage means. So, the first step in how to compare auto insurance rates is, study the different coverages.

Bodily injury refers to coverage for bodily harm, sickness or disease. Property damage liability is protection against liability for damage to the property of another, including loss of the use of property, as distinguished from liability for bodily injury of another. The collision portion of an auto insurance policy refers to car insurance that covers loss (direct or accidental) to the policyholder's own vehicle caused by a collision with another vehicle or object. And comprehensive or blanket coverage is the traditional name for physical damage coverage for losses resulting from theft, fire, falling objects, vandalism, and other various perils.

When shopping for car insurance, your policy must include the minimum amount of coverage required by state law. In most states, the following coverages are mandatory: X amount of dollars for death or injury of one person, X amount of dollars for death or injury of two or more persons, and X amount of dollars for property damage. For example, in Alaska the minimum coverage amounts are 50/100/25. This translates to $50,000 injury or death of one person in an accident, $100,000 injury or death of more than one person in an accident, and $15,000 damage to someone elses property.

Once you understand what the different car insurance coverages mean and you understand the minimum coverage amounts required in your state, it's time to start comparison shopping. You may contact three or four agents/and or company representatives in several ways. You may call, visit the office in person, or visit the company website. Describe the kind of policy youre looking for. Ask what the policy would cost you. It is important to be honest with each agent. If one agent thinks you will be driving on weekends only and another thinks you are driving to and from work each day, they are not going to quote you rates that can be compared.

Next, let the agent know that you are comparison shopping. If you fall into the low risk category, they will attempt to offer better rates. Never accept the first quote, meaning, dont let the agent pressure you into making a purchase before you have received quotes from three to four car insurance companies. Once you have obtained quotes from three or four companies, narrow them down to the best two. A great way to decide which one is the best (if they are pretty much the same) is to check the insurers financial stability. Standard & Poors (S&P) rates insurers financial stability, so be sure to check their website for details. Good Luck!

Tip: Visit the National Association of Insurance Commissioners ( to locate your state insurance department website. Your state insurance department website will contain information about state car insurance laws, minimum auto liability requirements, and more.

Michelle Burton is a published author and contributing editor for Auto Insurance Tips, Trouvé Media, Internet Brands, and Publications International, Ltd.

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