Shopping for Car Insurance: Tips for the Road
Believe it or not, when it comes to shopping for auto insurance,
the premium amount isn't the only thing that should shape your
purchasing decision. Unfortunately, many consumers aren't aware
that there are other factors to consider when buying car
insurance--and end up regretting their decision.
So before you sign on the dotted line, consider the following
factors and make a smarter decision about your car insurance
purchase!
Proper Licensure
Unfortunately for consumers, there are dishonest agents and
insurers in the marketplace that aren't licensed to sell
insurance. As you compare policies and insurance companies,
remember to verify whether your agent and the company he or she
represents are licensed to sell insurance in your state.
Go beyond verbally asking your prospective agent and check your
insurer's credentials through the Department of Insurance (DOI)
in your state. In addition to information about insurance, the
DOI also keeps track of insurers licensed to sell insurance in
your state.
If the DOI doesn't have record that your prospective agent is
licensed to sell insurance, don't buy a policy from that company
or agent--doing so will only open yourself (and your wallet) up
to becoming a victim of insurance fraud.
Financial Strength
If you've never thought about checking the financial solidity of
your prospective insurers, you're not alone. It is one of the
single most overlooked factors by consumers shopping for car
insurance.
The reality is that the cheapest car insurance in the world
won't do you any good if the insurer goes bankrupt or doesn't
have enough money to pay out your claim. Save yourself the
heartache of doing business with a financially unstable insurer
and check the financial standings of every insurer you're
thinking about buying a policy from.
Independent rating agencies like AM Best are great resources for
investigating would-be insurers--and can usually be accessed for
free.
Customer Service
Your insurance company, its agents, claims adjusters and all
other representatives should answer your questions and file
claims in a friendly and efficient manner. You can avoid the
frustration of doing business with an insurance lacking in
customer service by doing a little research before signing a
policy with them.
You can usually get a good idea of the insurer's customer
service skills through casual interaction with them. You can
also ask your prospective agent if there's a customer service
department or claims representative, which will typically make
it easier for you to contact someone if you need to file a
claim. Some consumers even call the insurance agency to see how
long they're put on hold before being connected with someone who
can help them. And, of course rating agencies like AM Best
typically disclose customer service ratings for inquiring
consumers.
Your Gut
During the auto insurance shopping process, pay attention to gut
feelings and reactions. If you see a red flag during your
interaction with potential insurers, don't ignore it. You're
better off taking your business to an agency and agent that you
feel comfortable with.
Applying Lessons Learned
While nobody likes to spend a lot of money on auto insurance,
you can make the most of your premium dollars by taking the
abovementioned factors into account. So, while you're on your
quest for cheap car
insurance, remember these tips to make sound purchasing
decision!
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