Drivers too often miss out on the best value. Here’s how not to make that mistake: Car insurance is inherently tricky to navigate because you don’t find out just how well it works (or doesn’t) until you have an accident. And if you’re lucky, that doesn’t happen too often. So how do you know if you have the right kind of car insurance for your budget and lifestyle? U.S. News interviewed a handful of car insurance experts to find out what you should do before making a final decision on your policy in order to get a good deal and decrease the chance of being surprised by unexpected costs after an incident. Here’s their best advice: When choosing a policy, start by asking friends for recommendations. “It always makes sense to first ask people who you respect who they have auto insurance with, and if they were happy when they had a claim,” says Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry group.
COMPARING APPLES TO APPLES When comparing policy prices, be sure to compare similar policies, cautions Phil Reed, senior consumer advice editor at Edmunds.com. Auto policies vary by length of time, level of service and an array of add-ons and options, he says. Instead of just searching the Internet to compare quotes that are nothing more than a price based on practically nothing, Reed recommends getting on the phone with a local insurance professional, too. Certain car safety features can help lower your rate as well.
OVER THE RAINBOW At the same time, there’s no need to obsess about constantly chasing a better deal. Jeff Blyskal, senior writer at Consumer Reports, says when the magazine asked readers to try to get a better deal with a competing insurance provider, only 12 percent of respondents were able to do so. That’s despite the slew of auto insurance advertisements that would have you think a better deal is always just around the corner. Once you’ve settled on an insurance provider, you’ll have the chance to consider various add-ons to your policy. In general, the more you pay upfront, the greater the coverage you’ll have. For example, you can opt for a higher deductible in order to minimize your rates – probably a good move for anyone who considers themselves a careful driver and can afford the higher deductible in the event of an accident. You might also want to consider rental coverage. Auto insurance policies often allow you to add on coverage for renting a vehicle while your car is getting fixed after an accident, and if you only have one car, that kind of coverage can pay off. “Every customer who didn’t have rental coverage wished they had it,” says Richard Arca, senior manager of pricing at Edmunds.com and a former insurance adjuster. It typically adds about $20 for six months to a policy, he says. On new and leased cars, GAP insurance can also make sense. You’ve might have heard that when you buy a new car, it loses value as soon as you drive it out of the lot. Leased vehicles also often carry a lower fair market value than what you owe on the vehicle. That means in either of those cases, if you total the car, the insurance company will only reimburse you for the car’s fair market value – and you could be out a lot of cash. GAP coverage, which stands for “guaranteed auto protection,” safeguards people from that problem. “It’s highly recommended for people who lease vehicles,” Arca says.