What you need to know before you shop your auto policy

Switching Car Insurance

by Mark Strohm

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Can switching car insurance really save you hundreds of dollars? One cannot watch TV, listen to the radio, or drive down a highway without seeing the claims. Everyone wants you to switch and everyone claims they will save you money.

I asked some individuals in the insurance industry to help me sort through all of these claims and give clear direction on how to really get the best car insurance. Here is what they shared.

First, ignore all the claims you read, see, or hear! Anyone can get any figures if they are not comparing apples to apples. If you want to understand who will really save you the most money, you will need to compare apples to apples.

When comparing prices you will want to start with the company you already have. Call them to find out several things. What coverage do you presently have? Is it appropriate for the age of my car and to safeguard my assets? Here is what you should know about car insurance:

Bodily Injury and Personal Property Liability covers you in case someone or something is injured by your car. This generally maxes out for a single person or for a total claim. For instance, 100/300/50 insurance provides $100,000 worth of coverage to an individual, $300,000 worth of coverage to all passengers and $50,000 worth of coverage to all property.

Personal Injury Protection covers the cost of medical and lost wages both to yourself and passengers injured within your car.

Collision and Comprehensive - Collision provides coverage for any time of loss or damage to your car except for theft or natural disaster in which Comprehensive covers those issues.

Uninsured Motorist protects you when other "at fault" drivers are not insured or are under insured.

Now, with your list in hand call a few companies to see what a similar policy will cost you. Remember that you want to compare apples to apples.

Next, go back to your present company and tell them if you found a cheaper rate. See what they can do for you. You may be surprised.

Once you have compared apples to apples make your decision. There are a few important things to keep in mind. First, there are direct writer companies and agent companies. It is possible to save with direct writer companies. Also, staying with the same company over time will generally save you money because of "perks," such as decreased deductibles.

More than traffic tickets and past accidents affect your rate. For instance, your credit rating may affect your rate. So if your credit rating improves, it may be well worth shopping around again.

Combining insurances usually saves money, but not always. Check out combining your house and car insurance. By the way, ask what a small life insurance policy would add. Occasionally the cost of the small life insurance policy is offset by the insurance combination discounts, allowing you to get some life insurance for no added cost.

Know what your state minimum coverage is but understand that it is rarely enough coverage, especially if you are a homeowner or if you have a family.

Are you paying too much for auto insurance?
Make sure you're getting the lowest rate.

Even though your insurance company is national and runs constant commercials, you should always check out how they perform locally. One national insurance may have very competitive rates for car insurance for those living in suburban areas, but may be very high for those living in larger cities. Or one company may have great rates for smaller cars, but high rates for vans, etc.

Also, you may want to "Google" the companies to see if they are paying claims regularly. Some very large companies have been in trouble with consumer organizations for not paying out claims.

If you would like to trim your car insurance, don't be discouraged by all the hype. Remember to understand what you have now and decide what coverage you need. Then compare apples to apples, give your present company the last chance to meet your expectation, and then make a sound decision that will keep you covered for the right price!

Mark Strohm is the founder of TriftyTimes.com. He and his wife began with a small printed edition in 1982. They'll celebrate their 30th year of helping others live a thrifty life next year.

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