What Auto Insurance Should I Carry?

 In Insurance Matters

Deciding what auto insurance to carry can feel like a daunting task. Many Americans overpay on car insurance simply because they have not ever shopped around for better coverage. According to Nola.com, the average Louisiana driver overpays on their car insurance premiums to the tune of $1200 per year. Since car insurance is compulsory, it is important for drivers to get in the habit of comparing auto insurance quotes every few years to ensure that you are getting the best coverage for your particular vehicle and your unique driver profile. If you have a local insurance underwriter, in most cases, they will perform this comparison for you at your request. There are several options for lowering your premium, but not every solution is right for every driver.

With the exception of New Hampshire and Virginia, all states in the U.S. require drivers to carry auto insurance for both bodily and property damage. The amount of coverage varies by state. The two basic brackets that car insurance can be divided into are “comprehensive” and “collision” insurance. Collision insurance, as the name suggests, protects your car and the other driver’s car in the event of a wreck. Comprehensive insurance covers accidents that may not be caused by a collision. For instance, if a tree were to fall on your car, you would need comprehensive insurance to file a claim. Most lenders require comprehensive coverage until the car is completely paid off.

Choosing an Insurance Carrier

According to Forbes.com, there are roughly 2,500 companies that offer property and casualty insurance in the U.S. Bankrate.com estimates that as many as 6,000 companies offer some sort of insurance. Even if you have a full time assistant, it would take months to compare all of the different variables that add up to make your particular policy. The Southern United States, in particular, has less competition than the East or West Coast, resulting in higher premiums. Choosing an auto insurance carrier almost certainly requires help from a professional.

Companies like J.D. Power & Associates offer annual provider ratings for auto insurance companies. They break down their rankings by region to help you more easily find the right insurance for you. Some people feel more confident using the most established and popular companies for their insurance. Using 2019 data, the top ten U.S. insurers by volume are State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers Insurance, Nationwide, American Family Insurance, and Travelers. According to J.D. Power, insurance customers rated companies by their own insurance claim satisfaction and the top five companies were, in order, State Farm, Geico, Progressive, Allstate and USAA.

Phone a Friend

Consumer satisfaction companies like J.D. Power are just one way to assess how good an insurance company is. Just like finding the right car mechanic, chiropractor, or attorney, there is value in the collective hive opinion of your friends and family. Reach out to your network on social media and ask for recommendations. People are often more than happy to share their experiences, both good and bad, with you.

Hire an Insurance Agent

As we become more upwardly mobile in our 20’s and 30s, our insurance needs tend to grow more complicated. There are mitigating factors that can drastically change your bottom line, such as getting married, having children, buying a home, buying an expensive car, switching to self employment, moving to a different zip code, and more. Most insurance companies offer discounts for bundling auto insurance with your homeowner’s insurance. A licensed, professional insurance agent can  find the best rates for you and make suggestions based on his or her professional experience. For some people, total coverage is the most important factor. For others, the monthly premium may be a deal breaker. A professional will understand your particular situation and work to help you achieve your financial goals and get the best coverage possible. 

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