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Car insurance quotes: questions you need to ask

Here are some questions you should ask any car insurance agent giving you a car insurance quote to be sure you get the best coverage

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Shopping for car insurance has been made much easier thanks to the Internet. You no longer need to call multiple companies and keep track of all your notes from each. While the Internet has broadened the scope and quickened the pace of comparing car insurance quotes, the basic questions you should ask to evaluate those quotes are still important, as is knowing what you're being quoted.ask a lot of questions when reviewing auto insurance quotes

Here are the fundamental questions you should ask when evaluating any car insurance quotes. The answers you get will help you put the best auto insurance plan in place for your budget:

What type of coverage do I need?

Building a car insurance policy starts with understanding what the coverage requirements are for the state where you live and drive. Every state requires licensed drivers to be able to show financial responsibility should they cause an accident and then be held liable for the cost to either repair the property damage or treat the injuries caused to others in the accident. Car insurance is the most common way to provide that financial responsibility and liability car insurance is the basic policy option put in place.

Every state sets a minimum required level of the two forms of liability insurance: bodily injury and property damage liability.

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Car insurance policies can be built with these additional basic coverage options:

(Click on any of the options for more information)

Some states require you to have medical payment or PIP coverage in place with your liability coverage. Other states require that you carry uninsured or underinsured motorists protection. The first question you'll need to ask an agent regarding any car insurance quote is if the policy you're being quoted meets your state's legal requirements.

You may also have contractual obligations for coverage types, which will have an impact on your car insurance rates. If you are financing the purchase of a car, or if you're leasing a car, the terms and conditions of your loan or lease may require you to have collision, comprehensive or both coverage options in place. Any car insurance quotes you review must clearly meet all your legal and contractual obligations.

How broad is this coverage (What are my levels and limits)?

You will want to ask questions relating to how much your insurance covers. Your answers are generally found in what's known as limits of coverage, a number that indicates how much your insurance company will pay out on any specific claim made on your policy.

States set minimum required limits for all mandatory insurance options and every insurance expert will tell you that these levels are notoriously low. Whenever possible, put the highest levels of coverage you can reasonably afford in place to assure yourself the best auto insurance.

You might be surprised to find out that some states also set ceilings on the maximum levels of coverage car insurance companies can sell for some coverage options. (For example, Connecticut won't allow drivers to have uninsured/underinsured motorist coverage in excess of their liability levels and Michigan sets a cap on how much medical payments coverage you can carry.) 

Honing in on the levels and limits of any particular package of coverage options is a great way to make a true apples-to-apples review of car insurance quotes.

What are my deductibles?

A deductible is what the car insurance company expects you to pay out-of-pocket on any claim before it starts covering expenses related to that claim. Not all coverage options are subject to a deductible. Collision and comprehensive are two of the most common forms of coverage that come with deductibles.

Most car insurance companies allow you to select a deductible for any coverage options carrying one, but some will limit your deductible options. For instance, MeLife sets specific, fixed levels of deductibles with a cap at $1,500.

When evaluating car insurance rates, line up all the coverage options with deductibles and realize those deductibles are an expense you will be responsible for. Add those deductible costs to the premium you will be paying for the coverage.

Remember, when considering deductibles, the higher the deductible you choose, the lower your premium should be.

What is the length of my term of coverage?

When comparing car insurance quotes, note how long any coverage policy proposal will be in effect. Most car insurance policies run for six months. A growing number of companies offer one-year policies to longstanding or highly qualified customers.

If you are combining or bundling coverage with an insurance company and having the same firm issue, say, a car insurance policy and a homeowner's policy, carefully review the length of term. Most standard homeowner's policies run for a full year. If you bundle car and home, make sure you're quoted rates are for full length of terms without a "possible rate increase" coming mid-year.

What discounts are available?

Every car insurance provider offers discounts on premiums based on a wide range of criteria. Some of the more common discounts are for:

  • Safe drivers
  • Good students
  • Multiple policyholders (bundling)
  • Select professions
  • A good credit rating
  • Military service (even ROTC)
  • Fraternity, sorority and select organization members
  • Installing safety equipment
  • Green energy cars/options
  • Early renewal
  • Paying in full

When you review a car insurance policy rate quote, ask the agent if the quote includes possible discounts. If the quote includes discounts, make sure you are eligible for them and that they are available to you in the state where you reside.

Get more details about other car insurance discounts here

What if my car is totaled?

car insurance quotes5Ask the agent what happens if an accident “totals” your vehicle. Insurance companies consider a car totaled if the cost of repairing the vehicle is more than the value of the car. If the cost to repair/restore the car to safe driving status exceeds the cash or trade-in value of the car, it will be totaled. Most insurance companies will only give you the Blue Book value of the vehicle unless you included a specific coverage option that provides for a different calculation.

If you are concerned about compensation should your car be totaled, ask about options like vehicle replacement options where the insurance company fully pays for a replacement vehicle under certain conditions.

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If you are leasing a car or taking out an auto loan to purchase a car, consider taking out Guaranteed Asset/Auto Protection (GAP) coverage in your car insurance proposals. A GAP or loan/lease payoff option pays any balances owed on a loan or lease in the event your car is totaled or even stolen.

(Find out more about the totaled car process in our guide)

How are claims handled?

Ask about the claims process. This is here where your insurance will actually be put to work for you. Be sure you understand how quickly and to what extent claims are paid out, including:

  • If medical or repair bills paid directly
  • If you are required to pay claims yourself and await an insurance company reimbursement
  • If collision repairs have to go to specific shops, or if you can choose your own mechanic or body shop
  • What the company's average time for claims resolution is

The answer to these basic claims questions can help you determine if you're getting the best auto insurance quote for your particular circumstances.

What endorsements are available?

car insurance quote6Endorsements are upgrades to a standard car insurance policy. All insurance providers have endorsements to better enhance your auto insurance coverage. Many are available at no additional cost. When receiving a quote for coverage, ask about endorsements. Here are some typical endorsements:

(Click on any of the following for more information)

(Curious about endorsements? Our guide covers everything you need to know)

 

There are more than 2,000 companies licensed and registered to sell car insurance in the U.S. There are the local companies focusing on your area; companies providing coverage to millions of people across the country; and even nationwide companies with local agencies. Understanding policy options and knowing what to ask when seeking car insurance quotes will help you decide which company is best for you. Let Reply! connect you with local insurance professionals, today to make your life a little easier.

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About the Author

Jeffrey Davidson is the Auto Insurance content editor at Reply! with more than 25 years of market research, PR, insurance sales and consulting experience. To share his insurance ideas, find him on Google+.