When you buy insurance coverage - called a “policy” - the insurer agrees to foot the bill for damage costs, should an accident happen. In exchange for this coverage, you have to pay your insurance agency a monthly fee, called the “insurance premium.” Usually, you’ll have to contribute a certain portion to the bill before your coverage kicks in. This is called your insurance “deductible.”
After an auto accident, the costs of damage can be tremendous. That includes your vehicle, other cars, houses and other property involved in the collision. It also includes medical bills for yourself, your passengers, people in other vehicles, and bystanders who are injured. Naturally, someone needs to pay for all of this damage. That’s where your insurance agency comes in.
According to the Insurance Information Institute, “Prices vary dramatically from company to company, so it pays to shop around.” Even if you have tickets and accidents on your record, you can find a company that will give you a lower rate. In the end, you need to find the insurer that’s the best financial fit for you. You can’t assume the first insurer you get a quote from is the cheapest.
Not all insurers offer all of the discounts mentioned here. But it’s worth it to ask about them.
The amount of vehicle accidents in a city depends on the area. Insurance companies track the number of accidents in a particular area, down to the neighborhood/ZIP code level, and factor that into the rates they quote for your insurance. Other factors involved that may affect your rate include:
A big difference between insurance companies is who they want as their customers. Companies target different groups of drivers. What this means is there isn’t one company that’s the best for everyone.
There are three main ways you can get a sense of an insurer’s customer service: