Automobile insurance is a tool that is used to help spread around the risk that is associated with driving, as well as paying for damages caused through auto accidents. There are a number of factors that each insurance company looks at to determine the rates to charge individual drivers. Each company places different levels of importance on those various factors. That’s one reason why a premium quote can vary so much from one company to another.
In order to effectively do a comparison of quotes from different insurance companies, one needs to be sure to compare apples to apples and oranges to oranges. The only way to know which company is providing the best pricing is to know how each separate portion of the coverage is being priced.
Liability insurance coverage
For example, if company A is providing $25,000 of bodily liability insurance coverage, but company B is providing $30,000 of the same type of coverage, it is not sufficient to merely look at the two quotes and decide to take coverage from company A because it shows a cheaper rate on the quote. In actuality, if company A were providing exactly the same amount of bodily liability insurance coverage as company B, the quote might show that company B provides a lower overall rate.
Another area to examine when doing comparisons is the area of deductibles. When looking at a quote, the deductible for comprehensive coverage may show as $100. When looking at a quote from another company, the deductible for the same coverage may show as $250. That means an individual would be required to pay more money out-of-pocket on a comprehensive claim if the second company were chosen to insure an automobile.
Finally, it’s a good idea to find out how insurance companies treat their policyholders. Ratings can be found online. If a company does not follow through with efficient customer service, find that out before you make a decision to give that company your business.