Insurance is something we all need but hope we never have to use. Nowadays, you can insure just about everything. From common things like cars, boats and homes all the way to celebrities insuring parts of themselves. J.Lo, anyone? Car insurance can be especially challenging to figure out. You may think car insurance is pretty straight forward. You just get into an accident, and then your insurance pays. However, it is not always that simple. Every day, we are bombarded with car insurance commercials promising us ‘the lowest rates’. In addition, there are so many different agencies out there that it is difficult to know which to select. With so much information out there, how do you even begin to shop for car insurance?

How-to Shop for Car Insurance: Deciding What You Need

Insurance Terminology

First, when you are going to shop for car insurance, it helps to understand insurance terminology. Your premium is how much you pay for your insurance coverage. Depending on which company you go with will determine how often you must pay this premium. Oftentimes, there may even be a discount for paying upfront in full. A deductible is how much money you have to pay out-of-pocket before your insurance will pay for any damage to your vehicle. Your coverage limit is the maximum amount your insurance will pay. Any damages above this amount will become your responsibility. Make sure you are aware of this number and comfortable for paying for anything above this amount. Lastly, a claim is when you or someone else asks the insurance company to cover the damage from an accident.

Shop for Insurance

When you are starting to shop for car insurance, it is good to shop around. Do not just settle with the first ‘big name’ insurance company you come across. In addition, it is beneficial to shop around and get new quotes every 6 months. According to The Zebra’s 2019 State of Insurance report, consumers just aren’t doing this. Over time, your car will get more miles and age on it. Plus, companies sometimes change their rates. It never hurts to keep checking what is out there to make sure you get the best policy and rate for your current situation. Some companies actually offer promotions, so remember to ask if you are eligible to take advantage of one of those.

If you do need to save money, you can make some adjustments to your policies. However, not all adjustments are wise ones to make. For example, do not reduce your liability coverage. This is what protects you in case of a serious accident. However, you can increase your deductible to make your monthly premium go down. By choosing a higher deductible, you will be able to save money upfront. Just make sure you are comfortable paying a higher amount in the event your vehicle is damaged. The alternative is to take the lower deductible and higher premiums.