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10 Questions to Ask Your Car Insurance Company

If you just sit down with an agent they may not be willing to give you all of the info unless you ask. So here are 10 questions you should ask
Author: Jack Wickens
Jack Wickens

Writer, Contributor

Experience

Jack is a personal finance writer who has been writing for more than a decade. His passion for educating consumers and helping everyday families earn more and live better. He is most knowledgeable with years of experience covering topics such as savings, budgeting, and responsible credit use and always happy to share his expertise with readers.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Author: Jack Wickens
Jack Wickens

Writer, Contributor

Experience

Jack is a personal finance writer who has been writing for more than a decade. His passion for educating consumers and helping everyday families earn more and live better. He is most knowledgeable with years of experience covering topics such as savings, budgeting, and responsible credit use and always happy to share his expertise with readers.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

Did you know that more than just the type of vehicle you have are going to impact your auto insurance? You need to take a look at different factors to get a good auto insurance quote and to make sure the quote you get is going to work for you. Shopping around for car insurance is extremely important and we’ll help you figure out how to do it.

You don’t want to just walk into insurance shopping with no idea what you’re doing. You need to know what to ask about and what type of coverage you need. If you just sit down with an agent they may not be willing to give you all of the info unless you ask.

So make sure you know the right questions that are going to get you on the right path to make an accurate comparison.

When Should You Look For Car Insurance?

You should look for car insurance about 20-26 days before your policy is set to expire. Experts say this might be the cheapest time to find a new policy that’s cheaper. 21 days before the expiry is expired is the average time to get car insurance at the best price.

You should also begin to look for insurance before you buy a car as dealerships always ask for proof of insurance before letting you drive away from the car.

How to Shop Around For Car Insurance?

Shopping around for car insurance can be done in a few simple steps and doesn’t take much time. The first thing you need to do is gather all your documents and have them ready to enter in details about yourself and your car to get a quote. Most quotes can be received online through the car insurance website.

You also need to choose the coverage you need. Try to choose the same coverage for each company so you can accurately compare them. Compare all the quotes and discounts you have available to you. Then you can purchase your policy and begin all the necessary paperwork.

1. What Coverage Do I Actually Need?

The very first thing you need to know is what your state requires you to have in the way of auto coverage.

Each state has a different minimum, so make sure you’re checking out what your state wants you to have before you even start looking.

For some, you may only need to have liability insurance, which means anyone injured or even killed in an accident that you cause will be covered, as well as any vehicle damage, property damage and even legal fees. Other states require you to have more than this, so be sure you’re evaluating your options.

Typically, the states with the most inexpensive car insurance rates have lower population densities and less costly lawsuits and accidents. This chart showing The Zebra data on the average annual premium costs, shows that the state of Maine offers the least costly car insurance. This is closely followed by North Carolina and Virginia.

However, there is only a 25% difference in cost between Maine and the 10th least expensive state, Indiana. This is a different trend compared to the most expensive car insurance states, where the cost can be significantly different.

10 Most Inexpensive States for Car Insurance in 2020

Talk to your insurance representative about the minimum and then work your way upward to different add-ons or items that you might want. Some people like to have collision insurance, comprehensive, uninsured or underinsured motorist protection or other areas.

These will depend on your specific wants and needs and you should be able to talk to your agent about what they will cost and how much value they could add.

For those who are leasing a vehicle or have a loan of any kind, it’s important to look into gap insurance. This will pay off the difference between what the car is worth and what is still owed on it if they have to total out the car.

2. What is My Deductible?

You want to know how much you’re going to have to pay if something happens to your vehicle. That’s what the deductible is. And it’s something that you actually get to have some say in. You can choose a higher deductible and pay a lower premium or a lower deductible and pay a higher premium.

In general, you’ll be able to have a range of different deductible options with your comprehensive or collision policy. They could range from as little as $100 up to $1,000 or more. And you’ll want to pay attention to which one you choose because it’s going to affect your out of pocket costs.

A higher deductible means you’ll save money every month. But if you have to make a claim you’ll pay more at that time. And a lower deductible costs you money every month but saves you money if you have to make a claim.

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3. What Is the Risk Assessment?

Your risk assessment is a specific number that’s assigned to you based on different factors such as your driving history. It determines just how likely you are to file a claim with the insurance company. The lower your likelihood the better your rates are going to be.

The higher the risk you pose the higher your rates are going to be. People who don’t get tickets or haven’t gotten into accidents will generally get better rates because they’re believed to be safer drivers.

Those who have had an accident or a ticket are considered a higher risk to the insurance company. If you’ve had a DUI it can be even worse, raising our rates as much as 36%. Of course, keep an eye on any kind of claim that is made on your insurance.

If you make a lot of claims, even if they’re not for accidents or your fault, you could see increases in your insurance rates and premiums for that as well.

4. What Happens if I’m in an Accident?

You want to know exactly what is covered if you have an accident. Don’t assume that your insurance is going to pay for everything, including towing, rental cars, replacement or repair.

You want to make sure you know the actual coverage before there’s a problem. If you have liability insurance you’re generally going to have coverage for damage to the other person’s property if you are at-fault for the accident.

Your own damages, however, are not covered unless you also have a collision policy. That means you’re going to be paying out of pocket for all of your own repairs and needs if this is all you have. Collision covers your own accident-related damages. On the other hand, comprehensive is used to cover other damages that come from something other than an accident.

For example, hitting an animal, storm damage, theft or vandalism is covered by this type of insurance. Make sure you also look into add-ons like roadside assistance or rental reimbursement.

Also look into things like underinsured or uninsured motorist coverage, which you may need if you’re involved in an accident with someone who doesn’t have the right coverage to pay for your loss.

For most states, bodily injury liability insurance is a requirement, but it may not actually cover everything that you need. Look at different policy limits with your insurance agent and see if you need to increase the amount of coverage you have.

If you don’t have enough and the insurance company doesn’t pay that means you’re the one who’s responsible.

Talk to your insurance agent about all of the different options with the insurance that you select or any different add-ons that you could use. These could also include personal injury protection, accidental death, total disability or medical payments.

Most drivers are aware that crashes can have an impact on insurance costs. In this chart using The Zebra data, you can see that an at fault crash increases the average cost of minimum coverage from $565 to $884. The price increase is even more significant if you have full coverage. You can expect to pay as much as 50% more on average.

How Much an at-fault Crash Raises Average Car Insurance Costs

5. Are You Available 24/7?

What happens when you’re in an accident in the middle of the night? Or on a holiday? Is there going to be someone at your insurance company that you can report an accident to?

You want to make sure that there are no delays in coverage and that there’s always a way that you can reach out to someone if you need to make a claim. Whether that means you have an office to stop into, a phone number to call or an online system is not important. You just need to have some way of reporting the accident or the claim immediately after you recognize it.

Talk to your insurance agent about the options and what happens when you need to make a claim. Find out how you report an accident or a problem when there are no office hours.

6. Can I Get a Discount?

There are a number of different discounts out there with insurance policies, so make sure you’re asking about any that you might qualify for.

It's a secret that the best insurance companies offer discounts, but not only. In fact, you might even be surprised at the variety of different discounts. You could get a discount for being a safe driver or for having insurance continuously.

Having multiple policies with the same company, multiple vehicles or even having a student with good grades can all help you as well. You may also be able to get benefits if you have a hybrid or electric vehicle or if you own your own home instead of renting.

Just make sure that you’re looking into everything that you can through your insurance company. Also, make sure that you actually ask for discounts. Your insurance agent may not just tell you what they are or offer them to you, even if you do qualify.

7. What Are The Policy Payment Terms?

Make sure you know what type of terms there are when you’re applying for insurance coverage. You want to know whether you can pay per month or if you need or want to pay annually or bi-annually.

You may be able to save some money this way if you can afford it, but it might be difficult for some people to do. Also, you want to know what the discount will be if you do.

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8. What Happens if the Car is Totaled?

Find out just how much money you’re going to get for your vehicle if they decide to total it out after an accident. You want to make sure that you’re getting the cash value or the replacement value and not a lower, agreed-upon value.

Keep in mind that the actual cash value means that your vehicle will be depreciated based on condition prior to the crash and then you will get that amount of money in cash.

An agreed-upon amount just means that the insurance company will give you a set amount of money if the car is totaled out. Knowing what you’re going to get is the first step.

9. Who Is Allowed to Drive My Car?

Find out who is going to be covered under your insurance policy.

If someone without a license (such as a teenager with a learner’s permit) drives your vehicle are they covered? What about someone who isn’t a part of your family or household?

You want to know who is covered and what will happen if any of these other people cause an accident with your vehicle. Or even if you’re using your vehicle for work purposes what will happen if there’s an accident?

Different insurance companies will handle this in different ways, so you want to make sure that you’re prepared. That way you know who should be using your vehicle and who you should be keeping it away from.

You’ll also know if you need to upgrade or change your policy to make sure everyone you need is covered.

10. How Do You Value My Car?

Find out just how much the insurance company you’re working with values your vehicle at. Pay attention to the right trim levels and engine and make sure that you have exactly the right version of the vehicle.

Different makes and models could vary by thousands of dollars and if your insurance company doesn’t have the right one listed it could cost you a lot. Make sure you’re getting quotes for insurance before you purchase a car.

You could find that the vehicle you thought you wanted is actually going to be far too expensive for you to insure. That means you may want to look at something different, that will help you cut down on costs.

Contrary to popular belief, a new car is not always going to be the best way to decrease your insurance rates. They may be safer, but they’re also more expensive to repair and more expensive to replace parts on. So you could end up paying even more.

How Long Does it Take to Get Insurance on a Car?

Applying for car insurance only takes about 30 minutes. You can enroll in car insurance any time of the year, unlike health insurance. You can also do the whole process online. You just need to scan in copies of all the information they ask for. Once you submit everything, they will verify your identity and then send you the policy information and insurance cards.

A few weeks or days after getting the insurance, they might ask you for extra documents about your proof of address or other questions they might have.

What Makes a Car More Expensive to Insure?

Older cars that don’t have safety features usually cost more on insurance plans. The likelihood of theft and the cost of repairs will also make the insurance plan cost more. You will have to prove where you live when you buy car insurance. If you live in an unsafe area or an area that is more populated, you might find that you pay more for insurance than those who live in quiet residential areas.

The city you live in also affects your insurance. Living in a bigger city makes it more likely you might get into an accident and will mean you pay more for insurance.

What is the Most Reliable Car Insurance Company?

JD Power is a great resource for information about insurance companies and their service. To create rankings of the best insurance providers, the company surveys customers.

The 2020 study identified key areas, including ease of use. The website experience was responsible for 34% of total interaction scores, but it also had an impact on overall customer satisfaction. Claim history also had an impact on brand loyalty. If a claim is denied, customers are more likely not to be satisfied and will renew their policy.

This is understandable, since it doesn't really matter how great an insurer is if you have to file a claim.

The 2020 JD Power Auto Insurance Study shows that the top-ranking brands differ by region. GEICO is the top-ranked brand in three areas, followed by State Farm in two.

Which Insurance Company is Best at Paying Claims?

The J.D. Power 2020 U.S. Auto Insurance Satisfaction Study found that State Farm, Erie and Geico were three of the top national insurance companies with the highest customer satisfaction ratings.

The study revealed which insurance companies provide the best customer service. You would have a positive experience with these brands if you were looking for a new insurance company to open a policy.

Should I Pay my Car Insurance in Full or Monthly?

It is almost always cheaper to pay your insurance premiums annually. A lot of companies offer discounts for paying in full. This is because it is more expensive for the insurance company to have a policyholder pay their premiums monthly, which requires manual processing every month.

You can save money on your annual premium and get rid of that bill for the whole year. People with income that fluctuates or is seasonal will find this extremely useful. They can also get an annual bonus or a tax refund. This can be especially helpful for those who have difficulty paying their monthly bills. If you are prone to late fees, paying the insurance premium once per year can save you money. You could save money if you are behind in your payments.

If you are unable to pay your car insurance premium deductible, or if you have the financial resources to pay a large upfront payment, then making monthly car insurance payments may be a better choice. You'll also want to be able to remove a teenager from your policy so you can save money immediately. A monthly payment might be an option for someone who doesn't have enough money to pay the annual premium, but is willing to invest it or use it to cover another major expense. 

FAQs

If you’re a new driver, you might find that your car insurance is a little more expensive than older people. New drivers are considered risky because they don’t have a solid driving record or proof they can drive safely.

If your new driver, you can try to get a car with added safety features as this will lower your premium. Teenagers can also take driver's education classes and then submit the paperwork to the insurance company when they apply for the policy. Most companies will give a discount to new drivers that took formal driving classes rather than solely being taught by a parent or relative.

Most car insurance companies offer a short grace period that allows your current policy to cover your new car. The grading period is usually only a few days though, you will need to switch the policy over as soon as you can.

Some car insurance companies allow you to switch the plan over to the new car, while others might make you get a new plan. Always contact your insurance as soon as you have the new car.

Yes. Most places recommend you get car insurance before you buy the car. If you know you are getting a new car, try to buy the insurance plan before you go to the dealership to pick the car.

Before you go home with the car, most lenders will want to see that you have an insurance plan and might not let you drive off the lot without proof.

This depends on your driving habits and the state you live in. If your car is being financed, you also need to check the requirements from the lender to see if they need you to have certain coverage.  Liability insurance is required in most states.

Collision and comprehensive insurance are not required by law, but you might need them if you have been leased the car and have an auto loan. Uninsured and underinsured motorist coverage is required in most states. It will pay for medical bills and property damage if you’re at fault in an accident.

Finding the best price on car insurance means you need to shop around before choosing one. Most companies allow you to request a quote, so you can easily fill in your information and see how much the company might charge you per month.

Make sure you submit all the details about your car correctly because many companies will give you discounts based on the safety features your car has. Some companies may also offer promotional discounts during certain times of the year where you can agree to certain terms and conditions and then get a better price on insurance.

Car insurance companies have to confirm your identity before they will give you a policy. This means they will need access to your social security number, your date of birth, your address, and in some cases, your income.

 

They can double-check everything by running a report, so don’t lie on the application or try to make up a salary. They will also you for proof of your identity and make you send in photocopies.

Single people usually pay more for car insurance. On average, married couples will pay about $160 less than those who are single. Being married doesn’t make you an automatic better driver though, it just means you might share driving responsibilities with your partner.

If one driver has a record or has been in accidents though, you might still end up paying more for insurance than single drivers.

Car insurance typically goes down after you turn 25. Once people have reached the age of 25, it’s said they are more mature and car insurance companies say they might be less of a risk when driving.

How much it goes down will depend on your driving history though, and in some states, whether you are male or female.

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Methodology

Our expert review team gathers data from many auto insurance providers in order to create rankings and estimate rates. 

Financial Stability: We analyzed each company based on industry benchmark ratings (summary table can be seen under “customer satisfaction” section) . Although insurance marketplaces do not have financial strength ratings they can still be useful tools for drivers who are looking for premiums at competitive rates. If you are looking for an insurer that doesn’t underwrite your policies, be sure to check the rating of the partner company. 

Coverage: Which types of insurance are available, their maximum coverage limits and any add-on policies. We also consider exclusions that are applicable to certain drivers.

Cost and Discounts: We review auto insurance rates estimates for many drivers across every state. The best scores are awarded to companies that offer lower rates and have many discount options for car insurance. You can lower your insurance premium by qualifying for any driver discounts. 

The discount percentages offered vary depending on where you live and some companies restrict the amount of discounts that can be applied to your premium. We looked at the discounts offered in the various companies that we reviewed. Many allow you to combine different insurance policies to save on premiums. There are many savings options for drivers shopping for car insurance. These include discounts based on the type of car, profession, driving record, and other factors. Companies that offer a variety of options could lead to a lower premium for drivers were favored by us.

Customer Service: We review customer feedback and reviews from J.D. Power. Data such as market share, complaints to the National Association of Insurance Commissioners for private passenger car insurance (2021) and overall ratio of those complaints to the industry average. 

In order to provide accurate and neutral information to our readers, our expert review team collects data from dozens of car insurance providers. Vehicles used include the 2017 Hyundai Sonata, 2017 Toyota Corolla, with annual mileage ranging from 10,000 and 20,000. We analyzed five credit tiers (excellent, good, very good, fair, and poor) and four types of people in different age groups. Lastly, we divided drivers to 4 categories based on safety history: Clean driving records, one at fault accident, one speeding violation, and one DUI.

We took into account parameters such as companies mobile apps, advanced online services, and telematics make it easier for auto insurers to respond to consumer needs. Many providers offer support via phone, email and agents. Some even offer live chat and 24/7 support via phone, email, or mobile app, while some provide social media responsiveness during weekends and after-hours hours.