Reader’s Question:

Is it advisable to buy coverage from a cheap car insurance company?

Liz

Memphis, TN

There is nothing wrong with looking for and buying coverage from a cheap car insurance company. With the way things are going in our economy, who would want to buy from a high-priced car insurance company? Besides, have you ever seen a company advertise itself as expensive? Every one of them will claim to offer cheap affordable rates but there are two ways a car insurance company can be cheap. It can be cheap in terms of price and actually offer the low rates they publicly claim. But it can also be cheap in terms of service.

Let’s say you come across really affordable rates on the Internet. Before you pull out your credit card or check book, you ought to ascertain the terms of coverage first. Regular coverage can sometimes be modified to become a low-priced package by lessening the actual coverage and this can come as a nasty surprise when the unforeseen finally happens. A cheap car insurance company doesn’t necessarily have to be cheap in terms of service. We simply have to be wise enough to do a little research first and check out which cheap car insurance company is actually reliable. Consumer groups and other independent bodies constantly give reviews and rate various providers. It wouldn’t hurt to read through some of them before you press ‘enter’ on that enticingly low quote flashing on your screen.

Reader’s Question:

I just got my driver’s license and am planning to buy a new car. I was wondering how important it is to avail of my own insurance coverage. If it is that important, how can I make sure I’ve contacted the best car insurance company and that I was able to get the best car insurance rate?

Mary

Brooklyn, New York

I’m assuming this is your first car, Mary, so I am very much happy to give you the information you need.

To answer your first question, yes, you have to buy your own insurance coverage before you can enjoy driving your new car. Keep in mind that it is mandatory in your state for every licensed driver with a registered car to avail of car insurance coverage. You wouldn’t like a bad record as early as now.

Making sure that you get to contact the best insurance company and you got the best car insurance rate is a tiresome and time-consuming process but very rewarding in the end–It gives you peace with a promise of security and stability in the roads.

You need to take into account factors that could determine which company is best and reasons that affect your car insurance rate. Getting to know your insurance company is somehow easy with the help of statistic agencies and private companies like J.D PowerRating and A.M Best and Standard and Poor’s rating. They both check insurance company’s services and rates. They collect data from financial policy holders in different states to be able to publish reliable financial strength ratings for all insurance companies. They take into account coverage options, price, after claims handling, customer service and the like to be able to rate each insurance company efficiently. You can also go to your State’s department of Insurance to check published feedbacks on insurance companies. Referrals from friends, neighbors and even coworkers can give you a certain impression towards a certain insurance company. It takes time and effort to find the best car insurance company that you can trust; you just have to do all the research that you need.

Mary, you have to take note that finding the best car insurance company does not end your research. Even if you have already got one, you still have to make sure that you get the best insurance policy that suits you, and it’s a tricky process. You need to know every factor that affects your insurance rates, how you could manipulate them and work it towards your advantages. There’s no need to rush when making a decision in buying your car insurance policy, so take your time, Mary. You have to analyze very well, check if it really suits your needs and never neglect even the smallest detail to get the best insurance rates you want to have.

Reader’s Question:

My car got hit by some guy from out of state. Where do I file a claim? From which car insurance company? How do I go about this?

Nadia

Baltimore, MD

Just file a claim the same way you would in any other circumstance. It doesn’t really matter so much who hit you or whether he is from Maryland, too. You must contact your own car insurance company, and the other party would do the same.

One of the most crucial steps to this often annoying and tedious process is getting all the details on paper. Make notes on what really happened and the extent of the damage to your vehicle. If you could find an eye witness who can verify your own account of the accident, that would be great. Both the police and the car insurance companies would need and ask for this information. Of course, be clear and consistent in telling your story. You wouldn’t want them to think you’re unreliable. Also, file a claim as soon as possible. Should there be any disparity between your story and the other driver’s, the other party’s car insurance company might phone you about this. It would be good to have your notes with you and refer to them as you answer their questions. After that, you can get your car fixed. Most car insurance companies have tied up with repair shops which they have pre-approved. Or you can go to the mechanic you trust. It’s up to you, Nadia.

Reader’s Question:

Which car insurance company offers the cheapest rates?

Paul

Long Beach, CA

Every car insurance company in the United States uses a unique system of rating its clients. So, the only way to know which insurer gives the cheapest rates is by obtaining quotes from each car insurance company in your area.

This is why it is very important to understand how insurers compute for your premiums. Firstly, your credit standing will be checked since companies believe that individuals who have not handled their finances well are high insurance risks. So, you may want to clean up at least the previous month’s financial statements first before getting those quotes. Gender is another factor that goes into the calculation of premiums. Women are generally safer drivers hence are given much lower rates than men. One’s age will also be checked by insurers. Drivers below 25 years old are charged with relatively higher car insurance premiums because the accident rate of this age group is very high. This is also the case with older drivers between 55 years old and above. So, if you plan to enlist teenagers or older drivers in the policy, then you should make them attend driving classes. This way, you get to avail of discounts that could significantly lower your premiums. Also bear in mind that the motor vehicle record (MVR) of those you include in the coverage will be pulled up by the prospective car insurance company. So it would be best that you only enlist those with good driving records for the past three years.