The Truth About Auto Insurance Part 3

By Anthony Ray 7/9/2021

Once you begin shopping for an auto insurance policy, please allow yourself a minimum of 30 minutes to one hour to complete the quote. This process can go quick, but more often it can be a very slow process. You want to be as efficient as possible. There are several routes that you can take to purchase an auto policy. You can shop online, you can purchase over the phone, and you can go into the office of a local agent. For convenience sake, buying online is a great way to purchase. I will say that if you are going to have questions about the coverage or customizing the right coverages to meet your need, then you may consider going to a local agent or calling and purchasing over the phone. There are certain restrictions when it comes to purchasing online. Be aware that some companies intentionally have you complete your information online and will still require you to call in to speak with a licensed agent. There are certain policy types or endorsements that are not allowed to be sold online through certain carriers unless purchased through a live agent. An example is the SR-22 because it has the possibility to cause more harm if done incorrectly.

Another benefit of working with a local agency is that most of them will offer coverage from multiple carriers. You can go into the office and they are able to provide quotes from several companies and find you the best rate. This way you can ask all of the questions you have and get a one on one consultation to ensure your needs are being met. There is a drawback on the local agency. One negative aspect is sometimes their hours of operation may not accommodate your schedule. In most cases, they keep banker’s hours so there may be limited availability to reach them in the evenings and weekends. Sometimes you may find yourself leaving a message and waiting for a call back. You must understand that the local agents are out chasing new business while servicing your needs at the same time. Please be mindful of this if you choose to buy from a local agency.

Online purchasing is very convenient where you can purchase a policy at anytime. Some companies have coverage packages created to make it easier to shop. They select the most commonly sold coverages and package them for you to select. These are usually in tiers from basic or economical, standard or most common, and premium to include higher limits and more coverage options. Please remember that sometimes the online system will prevent you from purchasing if certain information needs to be verified beforehand. Overall, this is the most convenient way to buy.

Shopping online is by far the most convenient way to shop for auto insurance. You can shop any time of the day or night, try different coverages options or view the rates from several carriers.

Over the phone purchase can be easy or difficult. You are dealing with a live agent. The best way to navigate this process is by having all of your information available, speak slowly and give information phonetically when needing to spell out names or give VIN numbers. Some companies are known for friendly agents and offering great service while others not so much. It is a best practice to be open with the agent and let them know if you have a lot of questions or concerns about certain coverages. Be clear on the type of coverages that you are looking for. Insurance agents are sales people and their job is to sell you things that sometimes you don’t need. Don’t be afraid to say no. If you are unsure, you can always add a coverage or coverages to your policy later. You will have the ability to increase coverages or reduce coverages at any time during the term of the policy.

You can cancel your policy at anytime. Depending on the carrier you may receive a refund back that is prorated for the time of use for the policy. Some companies charge early cancellation penalties. This is something that you definitely should ask before you purchase a policy.

Discounts are a very important aspect of auto insurance to be aware of. Discounts offered will vary from carrier to carrier and from state to state. Some common discounts that you will find are multi-driver and multi-vehicle discounts. Just like they sound, you receive a discount toward your premium for having multiple drivers and/or multiple vehicles on your policy. Depending on the types of policies the carrier offers, you may be able to get a bundle discount. A bundle discount is if you purchase other policy types like a renter’s insurance policy, homeowner’s policy, motorcycle policy, jewelry policy, boat policy, landlord policy, and etc. By holding multiple policies with the carrier, they will offer the bundle discounts which can reduce your premiums for your policies substantially. Other discounts that may be offered are:

Shopping for discounts can be very rewarding. The savings can be pretty substantial. You can tell by the smile on the piggy bank.

Pay in Full – You can receive a discount by paying for the full term of the policy upfront. This is not available in every state or with every carrier. Some states offer little to no discounts (some carriers charge a fee to pay in installments).

Good Driver – Driver has remained claim free for a specified amount of time

Good Student- Typically for drivers on the policy under the age of 25 who are enrolled in High School or a Higher Learning institution who maintain a certain GPA or achieve certain grades.

Defensive Driver – Most states offer drivers to take a defensive driving class. Upon completion, you will receive a certificate which will qualify you for a discount on your premium.

Affiliation Discounts – Groups or entities to include law enforcement, military, auto clubs, rider groups, and etc.

Prior Policy – A discount is offered for carrying continual coverage without a lapse. (You will be penalized by not carrying continual coverage too. A lapse in coverage is frowned upon and your premium will reflect that.)

In conclusion, when you have done your due diligence to know or at least have an understanding of the type of coverage that you are wanting to purchase, set aside some time to devote to obtaining a few insurance quotes. Gather all of the information of all drivers and vehicles that will be insured to include all driver’s license numbers and VIN numbers. You will want to have any documentation available that may qualify you for additional discounts.

Prepare a list of questions that you may have prior to starting the quote. Remember the agent should be able to help to guide you through this process, but it is very important to know how much that you are willing to pay. Unfortunately, the price of insurance is non-negotiable, so do not commit to something that you cannot afford. I mentioned that having a lapse in coverage will make your future policy rates go up. This will affect your insurance score and you must protect it like you should protect your credit score. Do not take out a policy that you cannot afford only to have it cancel. Remember that you can start off with lower coverage and increase as your financial situation improves. Don’t be afraid to shop around. Every carrier’s rates are different based on the location and the amount of claims they handle in those areas which will vary from carrier to carrier. You are not likely going to find identical rates from two separate carriers. They should be close in price; however, you will find some carriers whose rates are well above the others. This is done to reduce their current exposure in those areas. This is done at no fault of your own and is a common practice in the insurance industry.

It is very important to know that despite auto insurance being required in most states that it is intended to protect you and reduce your exposure to losses. You must know what you could be exposed to if your are involved in an accident. You need to know that your coverages will pay for all costs related to an accident if you are at fault. What ever expenses that are not covered will come out of your pocket. This means that you can be sued and the other party will come after your assets in order to recoup their losses.

Do your homework and dive deeper into making sure that you are adequately insured. Know how much average medical bills are for most vehicle accidents. Have an idea of how much it will cost to repair or replace some of the new model vehicles that are being driven in your area. Having this information can help you to select the right amount of coverage. You do not want to be underinsured. The next step for you to take is to learn about protecting your home and your assets whether you own or rent your residence.

Continue to learn more about the importance of insurance and its benefits. The more you understand it, then the better it can serve you.

References: Car insurance Types of Car Insurance

Thank you so much for reading the Deficit Dysfunction Rethinking Everything Blog. I hope that you were able to walk away with a better understanding of auto insurance after reading the series, “The Truth About Auto Insurance”. Please let me know your thoughts in the comments section or if you have any questions. You can send me your questions at Be sure to follow Preparation With Purpose on social media – Facebook, Instagram, Pinterest, and Twitter.

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