While no one likes to do it, it’s a fact of adult life: Everyone must buy auto insurance in order to drive legally. Everyone’s insurance needs are different, and there’s no one-size-fits-all coverage solution.
However, buying auto insurance doesn’t have to be difficult. Below are some tips to follow to get the coverage you need at a price you can afford.
Understanding Seattle’s Coverage Options
To get the right policy, you’ll need to determine which coverage type is suited to your situation. The more you know about your options, the easier you’ll have it when choosing the appropriate level of coverage.
- Liability insurance is generally considered the state minimum because it’s the lowest level of coverage you can have as a legal driver. With liability insurance, the other driver’s property damage and personal injury expenses are paid if you cause an accident.
- Collision insurance pays to repair your vehicle after an accident, regardless of fault. It eliminates the expense and hassle of paying out-of-pocket costs related to a collision, and it’s most beneficial to those who own new or exotic vehicles.
- Personal injury protection or PIP covers accident injuries sustained by you and your passengers. Irrespective of fault, PIP covers medical bills, ambulance fees and medication costs up to the policy’s coverage limit. In some instances, victims can use PIP to recover for rehabilitation services and lost income.
- Comprehensive coverage pays for damage caused by a non-collision incident such as theft, vandalism, or a natural disaster. If you’re financing a vehicle, you’ll need collision and comprehensive coverage to complete the transaction.
- Under and uninsured motorist coverage protects you from property damage and injury caused by an uninsured at-fault driver. It is particularly helpful if you live somewhere (like Seattle) where there are numerous uninsured drivers.
Decoding the Deductible
The deductible is what you agree to pay if you make a claim on your auto insurance. Once the deductible is paid, the insurance company pays the rest of the bill. Generally, the higher your deductible, the less you’ll pay in policy premiums.
However, you should be careful when setting a deductible, as lower rates can result in higher out-of-pocket expenses when you make a claim.
Look for Available Discounts
Most insurers add a few new discounts every year, and there’s likely to be a way for you to trim your monthly insurance bill by at least a few dollars. While not all discounts are substantial, even small savings can add up quickly.
For instance, a Consumer Reports study states that a driver with a multi-policy discount can save almost $100 per year. Discounts are available for the following situations, plus many more:
- Having more than one vehicle on a policy
- Having more than one policy type (such as life, renter’s or homeowner’s insurance) bundled with auto coverage
- Having a full-time student with a GPA of 3.0 or higher
- Having a new vehicle
- Taking a defensive driving course
- Having safety features such as airbags, antilock brakes, and anti-theft systems
Factors Affecting Seattle Drivers’ Insurance Rates
You may wonder what determines the amount you pay each month for auto insurance. While your driving history is an important factor, it doesn’t tell the whole story.
Most insurers consider a variety of factors such as gender, age, ZIP code, vehicle type, make, model and use, prior claims history, credit score, and marital status.
Because local regulations may vary, the factors might differ. For instance, in some areas, insurers aren’t allowed to consider a policyholder’s credit score. In others, ZIP codes can only be used as a secondary factor.
These rules are due in part to a recent finding that safe drivers in predominantly African-American ZIP codes pay abnormally high rates. Underwriters’ usage of credit scores is a controversial matter, but 90% of companies do consider them.
It’s possible to find an auto insurer that doesn’t do credit checks, but the policies are typically sold by higher-risk insurers and they can come with extremely high rates.
Choosing a Reliable Auto Insurance Company
While cost may be one of your main considerations, it shouldn’t be the only one. Insurance is about protection more than price, and protection should come with a high level of customer service. A bit of research can go far in revealing how a particular company compares to others in terms of its reliability and trustworthiness.
Before buying a policy, look at the company’s A.M. Best rating, which is an objective measure of its financial strength. Avoid insurers with low ratings, which may indicate an inability to pay claims. To learn more about an insurer’s claims handling ability, look for its J.D. Power rating.
Finally, check with the BBB to learn how well the company responds to customer concerns and complaints.
How to Save When Switching to a New Carrier
When you make the move to a new insurer, you shouldn’t cancel your old policy until you’ve bought the new one. A coverage lapse, no matter how short, can greatly increase the rate you pay.
Some insurers may offer you a discount if you switch policies a week before your next payment is due.
Saving When Buying a New Car
When shopping for a new car, you should remember that the vehicle’s make and model are a determining factor in the rate you’ll pay. Premiums vary based partly on the amount of damage a vehicle is statistically likely to cause in the event of a crash.
For example, it costs more to insure a two-ton pickup than it does to cover a small sedan. Every year, NHTSA releases its Relative Collision Insurance Cost Information Booklet, which Seattle car dealers are obligated to provide to potential buyers.
Insurers often have their own safety ratings based on data from previous claims. It’s a good idea to get a quote on any vehicle you consider before making a purchase decision.
Getting the Best Price on Auto Insurance
If you’ve ever looked for car insurance before, you know that different companies’ quotes can vary widely, even when coverage remains the same. The reasoning is simple: Every insurer uses its own data and pricing formula to determine the rate a customer will pay.
When you need to find a good deal, you should compare policies from at least three companies in the area, or more if you need customized coverage.
While car insurance is a necessity, paying too much for coverage isn’t. The best insurers simplify your options based on your needs, to make the process easy and relatively inexpensive.
By following the tips above, you can find the right coverage at the right price.