Want to buy a new auto insurance plan? The process can be a tad bit confusing for first-time buyers, especially since you want to ensure you’re getting your policy at the best price possible. That’s why we’ve put together this guide to explain certain basics that you need to know before purchasing an auto insurance plan.
How Is Your Auto Insurance Rate Determined?
Two factors impact how much you pay for auto insurance. The first factor is the coverage you opt for — a higher coverage will result in a higher premium, and vice versa. The second factor is the underwriting process. Based on these two factors, the insurance company will decide on a premium that covers the risk taken on by them.
Inquire About Discounts
Inquire about discounts from your insurance company. Discounts may be available for you simply because of the type of vehicle you have. The company may also award you a discount if you have a good driving record, bundle your policies, take driver education classes, etc. However, it’s important to keep in mind that not every state offers all discounts, so contact your agent to find out what discounts the company offers in your area.
Shop Around Before You Buy a Plan
Price quotations may vary from one agent to another, depending on the company’s financial situation and its experience with loss statistics. The total number of years that an organization has been in business may also affect the price. For this reason, before you speak to an agent, it is helpful to gather price quotations from different insurers.
Ensure Your Protection
Once you’ve selected the plan you want to purchase, there are steps you need to take to ensure you get your money’s worth. So, it’s a good move to call your state’s insurance department to verify that the company and the agent from whom you are buying the plan are licensed to do business in your state. What’s more, you should read your insurance policy carefully, given that it is a legal contract. If you have any questions or even doubts regarding the coverage or the rate, don’t be afraid to contact your agent.
