How to Find the Best Auto Insurance?

When it comes to having auto insurance, you really can’t compromise it. The thing about auto accidents is, there is no guarantee when it will happen. But when it does, it can harm you in terrible ways, and leave you financially wrecked.

Starting from high medical bills to a hefty cost of repairing or replacing your vehicle. Things can get from bad to worse if you’re sued by the other driver in an at-fault auto accident.

In some cases, you may also have to compensate for passengers in your own vehicle, and the other driver’s vehicle. If any pedestrians were hurt, you can also be held financially responsible to pay their medical bills.

So, to protect yourself from unprecedented financial burdens, it is crucial for you to know how you can find the best auto insurance.

With so many auto insurance providers out there, it can be challenging to determine which one’s the best for you. This article explores 8 steps to find the best auto insurance based on your needs, and budget.

8 Steps to Find the Best Auto Insurance

Choosing the right auto insurance company can be quite confusing, especially when there are so many options available.

The choice for the best auto insurance company depends on why you need the auto insurance, age, location, driving records, type of vehicle, insurance history, local laws, type of insurance coverage, coverage limit, credit score, insurance policies, discount rates, and more.

Typically, it also depends on how frequently auto accidents happen in your state, and whether it’s an at-fault state, or no-fault state. Plus, you also need to ensure you have at least the minimum auto insurance coverage depending on the state you’re in.

For instance, Michigan is a unique state, although it’s officially a no-fault state, it has adopted some at-fault state policies, which typically makes it a hybrid state. So, if you're in Michigan, you can consider checking out PLPD Insurance Agency in Michigan and get a free quote to learn more about our policies.

Most of all, it is important to ensure that you’re getting the right coverage that aligns with your budget while providing you with the financial safety that you need.

As it’s not worthwhile to spend $100s, or $1000s extra on auto insurance premiums, it's equally crucial to ensure that your coverage is adequate to protect you from significant financial losses in case of an accident. 

The 8 steps suggested here should help you find and determine the best auto insurance that aligns with your budget, and financial safety needs.

1. Determine Why Do You Need Auto Insurance?

Before you start looking for auto insurance, first it’s crucial to determine why you need it. Once you have listed down the reasons to get auto insurance, it will be a lot easier for you to evaluate which type of insurance coverage do you need, and the coverage that you should purchase.

Based on our direct experience dealing with auto insurance, here are 5 reasons why you need auto insurance.

Legally Mandatory: It is legally mandatory for you to have auto insurance in 48 out of 50 States in the USA, except New Hampshire, and Virginia. Based on the local state laws, you will have to acquire liability insurance in all the at-fault states, and personal injury protection insurance in 12 no-fault states, and a few at-fault states.  

Protects You from Lawsuits: If you’re proven to be partially, or totally at-fault for an auto accident then depending on the state that you’re located in, you may have to compensate the medical bills, vehicle, and property maintenance costs of the other driver or any other person who have been hurt in the accident.  

Auto insurance can typically save from hefty fines which can cost thousands, or even millions of dollars.

Required for Purchasing a Vehicle on Credit: If you’re willing to purchase a vehicle on credit, or on a lease agreement then your auto retailer may ask you to get auto insurance coverages like collision, and comprehensive insurance coverage. Collision coverage will pay for the repair and replacement fees, while the comprehensive coverage will compensate damages to your vehicle from natural disasters, animals, falling trees, theft, and vandalism.

Covers Vehicle Repair Expenses: Depending on the price, and type of your vehicle, the repair costs can widely vary. If you’ve a sedan you may not have to spend much on repair or replacement costs, but if you own a sport or luxury car then you may need a hefty amount to repair it.

Pays Your Medical Bills, and Loss of Income: Depending on the severity of the accident you may have to bear high medical costs, and while you’re receiving treatment, you may not be able to work. So, by having auto insurance you have access to a significant financial backup.

Apart from these 5 reasons, there may be other reasons to have auto insurance. For instance, if there’s a high number of car accidents in your region, that puts you at greater risk of getting involved in an accident. Not to mention, if the other driver is underinsured or uninsured, then by having auto insurance you can cover up for yourself.

First, be clear of the reasons why you need auto insurance, and then go for further research.

2. Set a Budget for Your Auto Insurance

According to recent studies, it was found that on average people annually spend $633 to $869 for minimum coverage insurance, and $2,150 to almost $2700 for full coverage insurance.

The cost of auto insurance can vary depending on the legal requirements, types of auto insurance, coverage limits, location, age, driving records, crime rate, weather conditions, frequency of auto accidents, vehicle types, insurance history, and more.

Not to mention, it also depends how much you drive your vehicle. The more often it’s on the road, the higher the chances of getting into an accident. So, consider all these factors, and plan your budget accordingly.

While you have the option to go for the minimum coverage depending on the state that you are located in. Yet again, you need to consider the fact that the minimum coverage may not be sufficient as it is only a limited amount.

In most of the states in the USA the minimum coverage is $25,000 for bodily injuries, $50,000 for bodily injury per accident, and $25,000 for property damage per accident.

In case it exceeds this amount then you will have to pay high deductibles, and invest repair, healthcare, and lawsuit fees from your own pocket.  

The main purpose of having auto insurance is to protect yourself from heavy financial burdens. So, even if you have to spend a bit more, it’s always worth it, especially to save yourself from financial hardships.

On the contrary, by setting a budget, you’re basically setting a monthly or annual target to spend on auto insurance. This will help you make wiser decisions, and more rational choices.

3. Gather Your Required Information for Auto Insurance

When it comes to getting a quote for auto insurance, the rates vary based on your personal records. So, that’s why it is crucial to ensure that you have all the information and documents ready before contacting an auto insurance agency.

Typically, here are the information, and documents that you will need to provide based on which the insurance company will assess your profile and propose a quote.

List of Required Information and Documents:

· Personal Information: Your name, address, date of birth

· Vehicle Details: Make, model, year, registration, mileage covered, safety features, and vehicle identification number (VIN)

· Driving License: Include a copy of your driving license, or specify your driving license number, whichever is required

· Driving History: Your driving records in the last 3 to 5 years, along with speed tickets, and fines for an at-fault accident

· Insurance Records: Your current and past insurance history in the last 3 years, ensure specifying the insurance type, coverage levels, and the amount of insurance claimed, along with the names, and birth date of the people listed on your policy.

· Household Members Excluded: If any household members are excluded from your current auto insurance policy, you need to mention their names and provide any other basic information required.

Gathering some of the documents may be a bit challenging, especially if you’re not aware of the process such as insurance history and driving records.

You can obtain your auto insurance records by contacting your current or previous insurance company. And to collect your driving records, you will have to visit your State’s DMV website and download it from there.

Your insurance may ask you for additional information, and documents like your medical records, or vehicle maintenance cost, make sure to provide them as well to get a more accurate quote.

4. Decide the Type of Auto Insurance and Coverage that You Need

The best auto insurance depends on your needs. So, you will have to figure out the type of auto insurance, and amount of coverage that you need.

To make things easier, it’s better to break down the types of coverage into two segments; the mandatory and the optional types.

Mandatory types of auto insurance coverage will depend on the state that you’re residing in. As for the optional types, they are available throughout the country, and the amount of coverage will depend on how much you’re willing to purchase.

Here are the 3 Mandatory Types of Auto Insurance which include:

· Liability Insurance: According to officialrecords the liability insurance is mandatory in 49 States in the USA except New Hampshire. The liability insurance has two components which include bodily injury, and property damage.

In Michigan, liability insurance is commonly known as PLPD, which is personal liability and property damage insurance. Liability insurance, or PLPD only covers the damage to third parties, it won’t cover your medical bills, or vehicle repair costs.

So, if you’re partially, or totally at-fault in an auto accident then your liability insurance will pay for the other driver’s bodily injuries, and property damage. If the other driver had any passengers, or if any pedestrians were injured in the accident, your liability insurance will also cover their medical bills.

You’re legally required to get the minimum liability insurance coverage mandated by your state.

According to InsuranceInformation Institute, the minimum requirement in most of the US States are 25/50/25, with an average annual premium of $633 to $869. If you feel like you need higher coverage, you can go for that instead of the minimum coverage, but in that case, you will have to pay a higher premium.

· Personal Injury Protection Insurance (PIP): Personal Injury Protection insurance covers the medical bills of you, and your passengers after an auto accident regardless of whoever is at fault. Additionally, PIP insurance also covers loss of income, childcare, along with funeral and burial expenses.

If you’re living in a no-fault state, then it is mandatory for you to have PIP insurance. It is also mandatory in 3 at-fault states which include Delaware, Maryland, and Oregan.

Unfortunately, PIP insurance coverage isn’t available in all US states, but if you’re living in any of these 5 States which include Arkansas, Connecticut, District of Columbia, Texas, and Washington, then you can get PIP insurance as optional coverage.

The minimum coverage significantly varies across different states, but you can expect to spend an average annual premium of $54 to $428 or more.

· Underinsured or Uninsured Motorist Coverage (UM/UIM): Underinsured, and uninsured insurance motorist coverages are essential, especially if you’re in an at-fault state.

Let’s say you end up in an auto accident with another driver who’s at-fault. And this driver is either underinsured, or uninsured. In that case, the other driver can only compensate for your vehicle damage, or medical costs from their pockets.

So, if there are thousands of dollars of medical bills, and vehicle repair costs, then you will be in trouble. You may have other auto insurance policies that can help you cover the costs, but that may put an extra strain on your limits there.

Therefore, it’s better to get a UM, or UIM insurance policy to cover you in such cases. The minimum coverage limit of UM, and UIM insurance varies across states, but in most US states it’s $25,000 per person, and $50,000 per accident.

According to Forbes, the annual average cost of UM insurance is $136 for bodily injury, and $36 for property damage. And the average annual cost of UIM insurance is $90 for bodily injury, and $46 for property damage.

It is mandatory to have UM/UIM insurance in 20 states which include Connecticut, District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, and Wyoming.

Apart from these 20 states, UM and UIM insurance is optional across all other states in the USA.

Based on your individual profile, your insurance company will give you a price quote for every optional insurance that you purchase. These optional coverages will compensate for bodily injuries, or damages regardless of whoever is at-fault.

Here are 6 optional auto insurance that you can consider which includes:

· Collision Insurance: The collision insurance covers your vehicle’s repair, or replacement costs if it’s damaged, or totaled by crashing with another vehicle.

· Comprehensive Insurance: Comprehensive insurance covers damage to your vehicle due to natural disasters, vandalism, and theft which includes both repair and replacement costs like the collision insurance policy.

· Medical Coverage Insurance (MedPay): Medical Coverage Insurance or MedPay, is a specialized auto insurance that covers your medical fees after an auto accident. It is available in all 50 states throughout the USA.

·  Gap Insurance: Gap insurance pays for the amount that you owe the bank or an auto retailer for credit, or loan purchases. It’s only applicable if your vehicle is totaled, or if it’s stolen. It will provide the additional amount that you need to repay for your vehicle’s loan purchase based on its actual cash value.

· New Vehicle Replacement Insurance: This is a special type of auto insurance that specifically pays the additional amount required to purchase a new vehicle. The amount that your insurance provider compensates will depend on your current vehicle’s actual cash value.

· Telematics Insurance: The telematics insurance policy is specifically designed for drivers who are looking for lucrative discounts on auto insurance rates. So, if you drive below 7500 miles a year, and if you can maintain a speed limit based on the insurance policies then you get a whopping discount of 25% to 40% on auto insurance.

This section covers 9 types of auto insurance which includes 3 mandatory, and 6 optional policies. But if you’re looking to explore more options, you can read our detailed article on 15 Types of Auto Insurance.

Search for the Best Auto Insurance Companies

When it comes to shopping for auto insurance, you have numerous options. While there are many insurance companies that offer competitive prices with attractive discounts. It's natural to feel gravitated towards more lucrative offers.

Here are 5 factors that you should consider while determining the best auto insurance companies which include:

· Public Reviews: Check public reviews of the auto insurance company on their website, Google Business Profile, and public forums. You can also search for existing discussions for insurance companies on sites like Reddit, and Quora. If there aren’t any questions concerning it, you can start to ask there or start a discussion about it.

While going through the public reviews, try to identify the percentage of auto insurance claims that they have processed, and paid for. And whether they have refused to provide insurance to anyone, if so, did it have any legitimate reasons?

Also, in the events of dispute, did they behave fairly with their customers? Most importantly, whether they complicate the investigation process to reject paying for legit insurance claims.

If any auto insurance company has either delayed payments, or tried to refuse it in some way, that’s a huge red flag. But on the contrary that only applies if the reason for rejections is legit.

· Trusted Third-Party Ratings: Customer reviews will give you an idea of public opinion, which is one of the best ways to evaluate any company. But customer reviews can be biased and misleading, especially as it’s hard to determine if the customer’s claim is legit.

That’s why it’s important to cross-check with trusted third-party sites that have a reputation for providing authentic ratings based on various credibility factors concerning auto insurance companies, and their policies.

So, you can refer to the analysis and ratings on trusted third-party sites like AM Best, and J.D. Power.

· Auto Insurance Policies: Make sure to read their policies very carefully, especially focusing on the coverage limits, discount policies, and especially the terms, and conditions. Pay extra attention to what your insurance policies cover, and under what conditions your claim will become invalid.

Depending on the type of auto insurance that you purchase, and the amount of coverage, there are terms and conditions for paying the compensation. Also, there is an average time frame for the insurance company to investigate your claim and process the payment.

See how much time it may require for them to investigate your claim and process your insurance.  Usually, it takes 15 to 30 days for most insurance companies to investigate and process the insurance claim.

So, within this time frame, you may have to pay certain medical fees, or repair costs from your deductibles. That’s why it’s crucial to go with auto insurance companies that can investigate, process and apply insurance claims as soon as possible.

Compare the policies, and shortlist auto insurance companies that provide the fairest, and most customer friendly policies. If it’s needed get the policies reviewed by an insurance lawyer.

· Auto Insurance Quotes: Depending on your budget, and your needs, compare the auto insurance quotes of the top companies that you find. If it’s needed, you can use online comparison tools like The Zebra. You can even contact insurance companies to get a direct quote from their agents.

With the use of online comparison tools, and your own research shortlist at least 5 to 10 auto insurance companies. Carefully compare the quotes to see which auto insurance companies are providing the best rate for your desired coverage.

And of course, again, don’t just pay attention to the quote, bundle offers, or discounts, see which coverages benefit you the most, and especially the terms and conditions that apply.

· Discounts Policies, and Bundle Offers: Make sure to carefully read, understand and evaluate discount policies with the auto insurance company. Sometimes, the discounted rates only apply for the first 2 to 3 months, and then the rates increase.

So, talk to the insurance provider, and go through their policies to be clear about the discounts. Also, find out terms and conditions that may cancel certain discounts, and to what extent these discounts will be available in the future.

See bundle offers, especially if you’re buying insurance for multiple vehicles. If you’re married, see if the insurance company has any exclusive bundle offers for couples. Also, if you buy multiple auto insurance policies you may get discounts too.

Remember, the cheapest quote may not always be the best option if it doesn't provide the coverage you need. While you are learning about auto insurance companies and their policies, don’t forget to ask questions directly to them, or on public forums.

As you’re putting your finances online here, it’s recommended that you do thorough research before making any purchase decision.

Find an Auto Insurance Broker, or an Independent Agent (Optional)

It’s always best to do your own research, when it comes to finding, and determining the best auto insurance company. But at the same time, the information online can be overwhelming, and it can also get very confusing.

Plus, if you talk to auto insurance agents of certain companies, they may try to promote the company they work for rather than providing honest answers. After all, it’s their job to convince potential customers like you to buy their insurance policies. And there can also be times when they try to influence you to buy additional coverage that you may not require.

So, if you need help either with the research work, or to get an unbiased second opinion from an auto insurance professional, you can consider hiring an auto insurance broker, or an independent agent.

Plus, if you don’t want to take the hassle of the entire application process, you can get your auto insurance broker to do it for you.

It’s also part of their job to file insurance claims and facilitate the entire process on your behalf.

While it may seem convenient, it can also be more expensive to hire a personal auto insurance broker. Not to mention, they may have sales agendas too, as they may be entitled to commissions from certain insurance companies.

So, again, do your own research, and take informed decisions even if you’re getting help from an auto insurance broker.

Make the Decision Based on Best Rates, Coverages, and Policies

Once you've gathered quotes, policies, and terms and conditions from different insurance companies, it's time to decide. Carefully compare the offers to identify the best deal for your specific needs.

The best auto insurance company for you is the one that offers the most competitive rates, adequate coverage, and favorable terms within your budget.

Final Step: Negotiate and Finalize 

Based on your decision, you should contact the auto insurance company that aligns with your budget needs, and best interests. Negotiate the quote, the terms and conditions, discount policies.

While you’re at it, ask any question that comes to mind, and have open-ended discussions to clear any doubt. Remember, before making that purchase it’s crucial to know about the insurance policies.

You can even negotiate with the best 2 to 3 auto insurance companies of your choice and go with the one that offers you the best deal. Depending on your choices, you can inform these insurance companies that you have better offers on the table.

This will help you gain an advantage in the negotiation phase, and you may be able to secure a better deal. Remember, the goal here is to obtain the best possible deal, and the company that provides it would be the best auto insurance for you.

If you live in Michigan, and if you’re looking for a reliable auto insurance company, you can contactus, and based on your profile, we will see what we can offer you.

FAQ

How to find the best auto insurance?

To find the best auto insurance, you should do thorough research to understand their policies, terms and conditions, compare quotes, discounts, and bundle offers. Also ensure checking online reviews and trusted third party ratings.

How to find the best auto insurance rates?

To find the best auto insurance rates you can either contact the insurance company and get a quote, or you can use online comparison tools to see which auto insurance companies provide the best rate.

Are there brokers who will help me find the best auto insurance?

Yes, there are auto insurance brokers, also known as independent agents. If you need help finding the best auto insurance tailored to your needs, and budget you can hire an auto insurance broker to help you.

How to find the best savings for commercial auto insurance?

You can explore discount policies, and bundle offers like multi-vehicle insurance, or purchasing multiple types of auto insurance to find the best auto insurance savings. You can also purchase a telematics insurance policy to get 25% to 40% discounts on auto insurance.