You just purchased a new car and it’s time to get auto insurance. You contact 3 different insurance agents and obtain quotes from 3 different insurance companies. You choose the company with the lowest rate and purchase the policy. You obtained the policy with the least current premium, but did you get the best value for your money?
Auto rates vary by company each year. One year Company A may have the lowest rates, the next year Company B, and the third year Company A has the lowest rates again. Since rates change it is important to purchase your auto insurance based on other factors as well as rates.
First of all, you want to have some knowledge of the company. Ask yourself: Have I heard of the company before? How long have they been in business? What do I know about the company?. It is important to choose a reputable company that has an established history in the area. If a company has been around for many years they must have some financial stability and customer service since they were able to stay in business for so many years. Most companies are proud of their strong history and will tell you about it. One thing to watch for is a company that is new to the area. Often times a new company will move into an area and offer low rates to establish itself in the market place and then it will need to raise rates to become profitable. In the end, their rates will be similar to rates of the well established companies.
Second, you should get to know the agent that is selling you the policy. You can tell much by viewing the agent’s office. Does the agent have stacks of files spread throughout the office or is the office neatly organized? The appearance of the office will reflect the agent and his or her attention to detail. The agent is your first person of contact with the insurance company and it is important to know that they are knowledgeable and can be trusted to make sure you are properly insured. You will want to find out about the other people in the office as well. You may need to report a claim or make a change to your policy and it is important to know that there will always be someone knowledgeable in the office to help you.
Third, you should ask about the claims service of the company. This is an area of insurance that consumers often overlook, but it is very important. When you purchase an insurance policy, you are receiving a promise from the insurance company that if you have a claim, it will be handled fairly according to the policy contract. Ask if the company handles their own claims or if they hire an independent company to handle claims. A company that has its own adjusting staff is usually better prepared for claims and provides a higher level of customer service. It is also nice to know the location of the claims staff so you know if you will be dealing with someone locally and how promptly they will handle your claim. A company will take pride in having a knowledgeable and fair claims department.
Fourth, you want the proper coverage for your situation. It is best to sit down with the agent and review the sections of the policy to make sure you know what you are buying and that it fits your needs. The liability coverage is the most important section of the auto policy. You want to be sure that you have the proper protection if you are at fault in an accident and responsible for injuries or damages to another party. If price is an issue, it is a good idea to raise the comprehensive and collision deductibles so that you can have adequate liability limits.
Remember that not all auto insurance is the same. Over many years the rates of Company A will average out to be similar to rates of Company B, so rates should not be the only basis for purchasing auto insurance from a company. It is important to make sure you are receiving value for what you are purchasing. To receive value you need to know that the company is financially sound to pay for losses and that it has the ability to fairly handle claims per the auto policy. You are placing trust in the agent that you are purchasing the policy from so it is important to be familiar with the agent and how they operate their office. Once you have the proper insurance, have fun with that new car and drive safely!