How to Find the Best Car Insurance

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Mar 3, 2020

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Here's what you need to know...
  • Different states have different requirements regarding the types and amount of coverage for your vehicle
  • Never be afraid to ask questions if you are unsure about a policy
  • Avoiding car accidents and traffic tickets will help keep your insurance rates low


In all of the virtual smorgasbord of car insurance TV ads, radio spots, and Internet blurbs clamoring for your business, the underlying theme always seems to be the bottom-line price. But finding the best car insurance for you is not just about price.

It’s about finding a policy that offers you the best protection you can afford along with great customer service and claims processing.

Enter your ZIP code into our FREE search tool above to compare quotes from multiple car insurance providers!

We won’t lie; finding the best auto policy is not going to be as easy as finding a gallon of milk at your local supermarket. It requires consumers to do some digging, ask plenty of questions, and compare multiple quotes side-by-side.

To help you in your endeavor, we’ve put together a few tips to get you started.

Tip 1 – Know What’s Required of You

Before you can identify the right car insurance policy for you, you must know what’s required by law. Otherwise, you have no starting point by which you can consider additional coverage.

Every state except Iowa has some sort of mandatory financial responsibility law; in most states financial responsibility can only be demonstrated through the purchase of a liability policy.

As an example, Wisconsin requires all drivers to carry a minimum amount of liability expressed as 15/50/100. All three numbers represent thousands of dollars as follows:

  • $15,000 per accident for property damage
  • $50,000 per accident for injury or death of a single individual
  • $100,000 per accident for injury or death of multiple individuals

Bank Requirements

Collision and comprehensive insurance are not required in any state as a matter of motor vehicle law. However, states give banks the authority to require drivers carry both types of insurance in order to protect their investment.

When you purchase a vehicle brand-new, there should be a clause in the loan contract stipulating the owner must provide collision and comprehensive coverage as long as the loan is outstanding.

In many cases, the language also stipulates the bank can purchase its own policy, and charge the customer accordingly, if the customer fails to provide the proper insurance on his own.

Once you know what’s required of you, it’s possible to adjust this coverage as needed. When you consider liability insurance alone, the minimum amount required is probably not going to be enough in the event you are sued after an accident.

If you find yourself in this position, you need to balance how much protection you want against how much you’re willing to spend.

If you have half-a-million in securities to protect, you probably have a large enough income to raise your limits substantially. You’ll need to do the same sort of cost-to-benefit analysis for all of the coverage you choose.

Tip 2 – Ask a Lot of Questions

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It’s impossible to say whether most people really understand how car insurance works.

But the California Department of Insurance considers the concept serious enough that it has put together a 17-page primer designed to educate high school students about what they can expect when it’s time to purchase their own car insurance.

If you are among those who don’t know much about insurance, don’t hesitate to ask a lot of questions. Start by asking friends and relatives you can trust to give you straight answers.

When you begin shopping around for quotes, ask questions of your local agent or the insurance company representatives you deal with. Examples of topics you might ask about include:

  • Annual deductibles
  • Coverage limits
  • Teen drivers or other adult drivers in your household
  • Discounts for which you might be eligible
  • Company policies regarding diminished value and betterment

Be Persistent with Your Questions

When you ask questions of industry professionals be persistent. Don’t settle for textbook answers that sound good but really contain no valuable information.

If you want a thorough explanation of deductibles, for example, ask an agent to provide you with an example of a scenario in which you would be required to pay your deductible.

If you need help understanding how your teen driver is covered under your policy, request a written document that lists the details in plain, everyday language.

As the customer, you have the legal right to a thorough understanding of any product or service you purchase. Any insurance company not willing to take the time to thoroughly answer all your questions is one you probably don’t want to do business with.

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Tip 3 – Learn as Much about Your Vehicle as Possible

One of the areas of car insurance many of us fail to take stock of is the car we drive. It’s probably due to the fact that the relationship between an insurance policy and the car it applies to never even occurs to us.

For example, SUVs and suburbans with full-time 4×4 capability are generally considered to be a higher risk for some types of accidents because of built-in design features that allow owners to drive them off-road. The potential risk translates into a higher cost for collision insurance.

JD Power and Associates addresses this very subject in a February 2012 report published on its website.

According to the report, SUV owners face a risk of rollovers three times greater than owners of standard passenger cars do.

The higher center of gravity and narrower wheelbase needed to make such vehicles usable in the off-road setting makes them more susceptible during sharp turns or hard braking events.

Custom and High-Performance Parts

In addition to knowing the mechanics and safety features of your vehicle, it also helps to know whether there are any valuable custom or high-performance parts onboard. You need to know this because it will affect the type of comprehensive and collision coverage you select.

Most standard collision and comprehensive policies only cover your vehicle at the value it would cost to replace it with a similar vehicle of the same make, model, and year.

Since most vehicles don’t come from the factory with high-performance parts included, your claim payment will not take into consideration the value of such parts.

If you’ve invested large amounts of money customizing your car, you’re going to want a different type of collision and comprehensive coverage.

Rather than standard replacement value coverage, you’re going to want actual cash value coverage.

“Actual cash value” is an industry term used to describe the fair market value of damaged property that needs to be replaced.

If you had $5,000 in high-performance parts added to your vehicle, the fair market value of that totaled car would be the sum of its Blue Book replacement value plus the added cost of high-performance parts of equal value.

An actual cash value policy costs a bit more than a standard replacement value policy. But that’s to be expected. What you need to be concerned about is agreeing on a value with which both you and your insurance company are comfortable.

You’ll need to save all of the receipts for the parts you installed, plus any maintenance records that might be germane. Your insurance company will probably request an appointment to come out and take pictures and examine the vehicle for themselves.

Now Go Find Your Policy

If you can follow the sports page and understand baseball box scores, or find the best deals on Black Friday, you can find the right car insurance policy. It just takes a little effort to learn and apply. Armed with these tips, you’re better prepared to go out and find what you’re looking for.

Be sure to compare policies side-by-side, asking questions and making sure you’re taking into consideration the cost of a policy as compared to the value it provides.

Furthermore, don’t forget that you can reevaluate whenever your policy is up for renewal. You’re not required to stick with the same carrier your entire life.

Final Thoughts about Your Driving

Some final thoughts regarding keeping your car insurance affordable: the price you pay depends heavily on how you drive.

It would be a shame for you to go through the arduous process of finding just the right policy at the right price, only to then be slapped with a violation a month after the policy takes effect.

That violation changes everything in terms of your premiums and how your insurance company evaluates you as a risk.

Do your best to avoid accidents and violations at all costs. Practice defensive driving whenever it is practically possible, and be extra careful when it’s not. Obey all traffic laws regardless of your circumstances. The best way to maintain car insurance you can afford is to stay out of trouble.

You can get started putting these tips into practice by entering your ZIP code into the FREE search tool on this page! Compare multiple rates from different companies to see what works best for you.

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