Shopping for insurance can be a complicated and confusing process. Each insurance policy is a unique purchase, and shopping for it requires a smart and proactive approach. Unlike every other product and service people buy, those shopping for insurance hope they will never have to use it.
Think about it: you buy a car insurance policy, but you hope never to be involved in an accident. You protect your property with homeowner's insurance, but you pray your house never burns down. You cover your small business with liability insurance, but you still do whatever you can to avoid being sued.
So even though you hope never to use the insurance coverage you buy, you still want to get the best possible deal. The very fact that you may never use the coverage you buy is a strong incentive to keep your premiums as low as possible - after all, who wants to pay too much for something they may never use?
Luckily, Underground Elephant is taking the mystery out of car insurance by offering tips and tricks for lowering your car insurance payment and providing a personal quote comparison tool from the nation's top providers. The organization also established the Underground Elephant scholarship, which offers $1,000 to a student who is a safe driver and is working to make a difference in their community.
Here, Underground Elephant details the best way to shop for insurance:
Assess Your Coverage Needs
Before you start shopping for insurance, you need to know how much coverage you need, and what type of policy is the best fit. Insurance is not a one-size-fits-all purchase; coverage must get customized for the needs of each.
If you are shopping for car insurance, for instance, you will first need to decide what type of coverage you need. Do you need comprehensive coverage that will pay to fix your car, or liability coverage to protect other drivers? If your vehicle is an older model, the cost of full coverage may not be worth it, since the amount you receive will be limited to the fair market value of your car.
Whether or not you need comprehensive coverage, you will need liability coverage on your car insurance policy. The amount of coverage you need will depend on several factors, from the size of your asset base to your comfort level.
Shop Around for the Best Price
Now that you know how much insurance coverage you need and what type of coverage is right for you, it is time to start shopping around. The specifics of the policy may be the same, but the prices can vary widely, and shopping around is the only way to get the best price on your premiums.
The reason premiums vary so widely is because each insurance company uses its own set of underwriting standards. These underwriting standards are used to determine the level of risk, and they will directly impact the amount you are asked to pay.
It is essential to compare apples to apples when shopping for insurance, so give each agent the same information. From the amount of liability insurance, you need to any discounts you are eligible for, everything should be the same.
Armed with this information, you can shop for the best price, but it is important to look at the quality of the company as well. After all, the insurance is worthless if the company involved is not willing to stand behind the coverage. You can find ratings and reviews online, so do your homework and make sure the coverage you are purchasing is worth the price.
Choose the Right Deductible
It is easy to forget about the deductible when choosing insurance but doing so could cost you extra money. When you are offered coverage for your car, your home or your business, you will be asked to choose a deductible level - the amount you will have to pay out of pocket before the insurance kicks in.
It can be tempting to take the lowest deductible offered but doing so could drive up your premiums and cost you more money in the long run. Since the chances of suffering an accident, incurring damage to your home or having your business sued are relatively low, accepting a higher deductible is typically a worthwhile gamble.
As you are getting quotes, be sure to ask for prices at several deductible levels. As you do so, you will no doubt recognize the relationship between deductible levels and premium prices.
Once you have the information you need, you can choose the deductible that works best for you. If you feel you could cover a $1,000 expense, choosing that deductible level could save you a lot of money on your premiums. You can then direct those savings into an individual savings account so the money will be there should you need it.
Review Your Insurance Needs
Buying insurance is not a simple matter, but your work is not over once the policy is in place. Your insurance needs change and evolve, so it is important to review your coverage to make sure it is still sufficient.
You may need to increase the amount of liability coverage on your automobile insurance from time to time to keep you protected. You may outgrow your need for life insurance once the kids are grown and gone. You may become eligible for additional discounts on your insurance policies if you install an alarm system or take a defensive driving course. Considering all of these things can help you save money while ensuring you have the coverage you need.
Buying insurance can be a daunting task, but it does not have to be. Once you know what to look for, how to assess your needs and how to shop around for the best price, you can make the most of the money you spend and get the coverage you and your family need. Underground Elephant works to make this process as simple and hassle-free for you as possible.