A valuable skill we’re not taught in school is how to shop auto insurance. For anyone who has had to rate and compare insurance policies on their own when looking to sign up for a new plan, you know that it can be very confusing. Insurance policies are full of legal jargon that only experienced agents understand, making it even more difficult to comprehend what each policy offers.
At CoverHound, we make it our job to help you in your search for an auto insurance plan that meets your needs and gives you peace of mind.
The very first thing we all need to do when looking for an auto insurance plan is to know what kind of policy we’re required to have. Every state across the US requires some form of liability or auto insurance by law. What’s important to keep in mind is each state sets the minimum amount of coverage, and it in no way reflects the amount of coverage that would actually benefit you should you be involved in an accident.
The Department of Motor Vehicles (DMV) suggests that drivers take out more coverage than their state mandates, as no two traffic accidents are alike. While some accidents result in nothing more than a scratch to your fender (curse that flying hubcap on the freeway!), others result in totaled cars and bodily injury. If you choose to take the bare minimum, there’s a good chance you won’t be fully covered when you’re in a traffic collision, and you will have to pay for damages out of pocket. If you can’t cover the damages, there is a likely chance you will be sued. But with the right insurance plan, you can avoid any future financial mess.
According to the Rocky Mountain Insurance Information Association, (RMIIA) in 2013 alone, the average auto liability claim was $3,144, with the average comprehensive claim totaling $1,621. If that’s the average, can you imagine what the high is? As a responsible driver, you want to make sure you’re covered in the unfortunate circumstance of an accident. This means you have to get a plan that works for you.
According to the Insurance Information Institute (III), you will find that auto insurance is generally broken into six categories: Collision, Property Damage Liability, Bodily Injury Liability, Personal Injury Protection (PIP) and Comprehensive. Each of the six insurance categories provide coverage based on a number of factors, and some are not as obvious as others. Let’s take a look at the factor breakdown below.
Insurance agencies base their coverage plan on a host of factors, including the make, model, and year of your vehicle, where you live, your credit history, driving record, and even your age and gender. Insurance companies compare this information with the annual traffic safety statistics that agencies like the National Highway Traffic Safety Administration (NHTSA) and Insurance Institute for Highway Safety (IIHS) produce.
For example, if you live in Denver, Colorado and drive a Honda Civic, statistically, you are driving the number one car in Colorado’s list of top 10 stolen vehicles in 2014. This means you are more likely to pay a larger monthly premium. But where one factor may inflate the premium, another can lower it. For example, if you have a clean driving record and take precaution in where it is you park your Honda Civic (you park it in your garage versus on the street) your monthly premium has the potential to be reduced. When you take strides in protecting your vehicle, your potential insurance company will take strides in protecting you.
After determining your vehicle’s worth and how often you drive it, take a look at what competing insurance agencies have to offer you as part of their auto insurance packages. At CoverHound, we match you with a selection of economical coverages from top-notch agencies. Take a look at what the insurance world has to offer you today by visiting our online insurance shopping and comparison site.