Buying Car Insurance Online

If you are looking to buy car insurance online, or simply get car insurance quotes online to compare your current service, here are some basics that you should know before starting your journey.

Auto Insurance Terminology

There are a couple of important terms that you should understand.  The first is Liability Coverage and the second is the difference between Collision and Comprehensive Deductibles.  The amount of coverage and amount of the deductibles will play a big factor in how much your policy costs.Keep in mind that the lowest price policy may not be the best for you.

Liability auto insurance is required in 49 different states. This is the typical auto insurance coverage that pays others when they’re hurt, or their property is damaged, in an accident that you cause.  So, what should liability coverage be?  Only you know, so ask yourself, can you pay for any damages you cause that exceed your coverage limits? The higher your liability coverage is, the more damages your policy could cover.

Next, collision coverage pays to fix your own car following an accident.  And then there is comprehensive coverage which pays for damage to your car not caused by auto accidents, such as weather related or vandalism.

What should your collision and comprehensive deductibles be?  Simply, higher deductibles lower your premium, but will cost you more out-of-pocket if a loss occurs.  How much are you willing and able to pay to save on your premium?

Do you need collision and comprehensive coverage?  If not, you will have the most basic car insurance.  If your car is leased or financed, it’s going to be required.  If your car never leaves your garage, maybe you don’t.  But if someone keys your car in a parking lot, there’s a mysterious hit and run, hail damages your car, etc….. Do you want to pay out of pocket to make the repairs?  If not, set the car insurance coverage amounts to a limit you are comfortable with.

Research the Car Insurance Company

While it’s great to get a good deal with an online auto insurance policy, is that company reputable?  You want to make sure it’s around to pay the claims.  Getting insurance from a shady place in a strip mall, that doesn’t have any furniture and all the signs are hand-written….does that seem like a reputable company?  Probably not.  So how do you know?

Fortunately there are many places to do research and find the best auto insurance companies.  Start with the independent ratings companies, such as A.M. Best, Fitch, Moody’s and Standard & Poor’s.  They can help you determine the particular insurer’s financial health.

You’ll find that a lot of the pure online companies as actually backed by major insurers. Esurance, for example, is an Allstate Company.

Ways to Buy Car Insurance Online

Can you buy auto insurance online?  Of course.  It’s not even a real question any more.  You can shop for insurance online or work directly with a local insurance agent.  Local agents have had it tough over the years as the online-only insurance companies dominate advertising.  You can still find plenty of agents buying billboards, advertising on the back of grocery receipts and more so that you know they’re still around.

You should get multiple quotes because prices for the same level of coverage vary greatly.  Why?  Car insurance prices are based on risk and each carrier has its own formula for measuring the risk and potential for filing claims.

Some car insurers use their own insurance scores to determine how likely policyholders are to file claims, which could be based on where you live or your credit history. Other companies may base it on the type of car you drive and how often you drive.

Sources of Auto Insurance Quotes

If you need auto insurance quotes, there are plenty of places to do so online.  One of the most popular Google searches is for "car insurance quotes online".  And I'm sure you've seen a few ads on TV recently for someone who will can help you save with 15 minutes of your time.

Before you start, be sure you know the basics of your car, the liability coverage you need and the limits for your collision and comprehensive.  That way you'll have the same variables across the board.

Once you do research to figure out your preferred companies, identify your limits and start to compare car insurance quotes, you should have a clean playing field for comparison.  I find it helpful to create a Google Sheet to store all of the information.  Especially if you have 5 or 6 car insurance companies to choose from.

Finally, don't forget to ask about discounts.  For the big companies that also write life insurance and home insurance policies, you will get a discount for having multiple policies with the same company.  A new trend the past few years has been telematics.  This is where the car insurance companies gives you a small device you plug into your car that tracks your usage patterns.  How much you drive, how you brake, how you accelerate and more.  You may say that you're a safe driver, but they'll know for sure based on the data.