Shopping for Car Insurance
Shopping for a car is one thing, but shopping around for the best deal on auto insurance can sometimes require the same time investment.
Jennifer Reeves, office manager at Farmer’s Insurance in Logan, said finding the best auto quote requires a lot of research. Some drivers call an insurance company to quote two different cars before actually buying one of them to help find out which car will be more insurance affordable.
Reeves, who has worked for Farmer’s Insurance for more than four years, said people can make the process easier by first getting organized with driver and vehicle information. She said she suggests calling a few different places to get an auto quote before deciding to go with one company.
“Getting an auto quote is a good ballpark,” she said. “It gives you an idea of how much your premium will be. But each company has different guidelines.”
Some companies, for example, will give discounts if a student has a grade point average of 3.0 or more. Other companies may not offer the same discount but may instead give a discount for married students.
Ruth Clark, licensed self-producer at Allstate Insurance in Logan, said Allstate offers a discount for having multiple policies with them.
Quotes are usually obtained through an insurance company or by going online to a company’s Web site. The State Farm Web site, located at http://www.statefarm.com/insurance/quote/arq, states a quote will take about 10 to 15 minutes to be completed. Calling an insurance company can take the same amount of time, and most companies have Web sites set up for drivers to receive quotes.
When calling an insurance company for a quote, students need to supply their name, drivers license number, years of prior insurance, date of birth and any tickets or violations the drivers know may be on their record.
“The more accurate your information, the more accurate your quote will be,” she said.
Reeves, who works for Farmers agent Corrie L. Bingham, said a quote can be even more accurate if the caller is comfortable giving their social security number as well as the vehicle identification numbers for all the vehicles to be insured. Giving a car’s VIN allows the driver’s exact car make and model to be pulled. Reeves said Hondas and Toyotas can sometimes be more expensive cars to insure, so knowing the exact model can help pinpoint an accurate price.
“A quote can be more expensive based on replacement cost (of the car),” she said.
The State Farm Web site states the driver should include other information such as a current odometer reading and current insurance information with expiration date.
The insurance company, Reeves said, also uses the driver’s information to pull a driver’s motor vehicle record to verify the number of outstanding tickets or accidents on their record. A speeding ticket, for example, can stay on a drivers record for up to three years. And having a ticket or accident on record may end up increasing the premium on an auto quote.
“It increases your risk as a driver because you are more likely to cause accidents or file a claim,” she said.
Reeves said to always make sure auto insurance is on time and up to date. A consequence of not paying insurance is the cancellation of the insurance. If a driver is pulled over and their record shows canceled insurance, it can be a “pretty hefty fine,” Reeves said.
“You have to pay the fine, you often can get your drivers license suspended,” she said. “When you get your drivers license reinstated, if you’ve had a ticket for no insurance, the state places something called an SR-22 on your record. This allows them to monitor your insurance and make sure you always have coverage.”
The minimum time frame for an SR-22 to remain on a driver’s record is three years. At any time during those three years, random checks can be done to make sure a driver has insurance associated with their drivers license number.
“If you don’t, you get your license suspended,” she said.
Another factor that influences the price of auto insurance is something called a consumer report. This personal consumer report is to help the insurance agent decide how much risk is involved to insure a particular driver. Some of the driver’s information is put into a system and then, depending on the outcome, the driver is lumped into risk categories.
Clark, who works for Allstate agent Eric Sorensen, said Allstate uses a system of numbers, one through 16 scores, with one being the best and 16 being the worst risk possible. Clark said this is called an insurance score.
“What they’ve done is compiled a lot of consumer reports, and what they’ve found is that people who tend to have a higher score are ones who usually will file more claims or they don’t pay their bills on time,” Clark said.
Reeves said Farmers Insurance calls the report a FARA and uses an alphabet scoring system with A being the best and Z being the worst.
“Your score can be affected by (many things), including not paying your insurance, if that’s one of the criteria your company looks at,” she said.
AUTO LIMITS
There are two different types of auto insurance available: full or liability.
Clark said the term full coverage can be misleading to people. It includes both comprehensive and collision coverage, where liability only covers the other person’s vehicle.
“Full coverage is basically where you have comp and collision on your policy, so it’s gonna cover damages to your car if you’re at fault on the collision and on comp,” she said.”It covers for fire, theft, wind, vandalism and (Allstate) also puts your windshield under that. But it’s a misleading term for some people that don’t know anything about insurance.”
Reeves said a driver receives a declaration page in the mail after they have chosen an insurance company. This paper states coverages and limits for each vehicle insured and shows a figure such as 25/50/25 or 50/100/50. Reeves said understanding this figure is extremely important.
The first number means the bodily injury maximum amount paid out in the event of an accident. This amount, Reeves said, is paid out to other people involved in the accident, not including the insured driver, and helps cover any bodily injury caused to others. The second number means the maximum amount paid to all injuries in one accident, she said.
“Liability limits are generally listed in the thousand dollar increments, so if you have a limit that says 25/50, it means $25,000. The reason there are two different limits for liability is because there is a per person and per occurrence limit,” she said. “So if you are in a vehicle by yourself and you hit another car that has one person in it, they would have $25,000 for themselves or 50,000 for the entire accident if they needed it. If you hit a car that has six people in it, you have those same limits of coverage for all those people. So you would have 25,000 per person or 50,000 for the whole accident.”
The third number means the amount put toward property damage.
“This pays for what you hit – the car, the building, anything other than a person,” she said.
Other parts of liability insurance are uninsured motorist and underinsured motorist. Uninsured motorists pays for personal injury caused by someone else who has no insurance to pay for a driver’s medical damage. Underinsured motorist coverage means the difference between what the at-fault party’s insurance has and what the actual damage is.
“So let’s say you get injured in an accident and you have $100,000 worth of medical damage to yourself and the person who hit you only had $50,000 of insurance coverage,” Reeves said. “After their insurance takes over, your underinsured motorist coverage then takes over.”
Collisions and comprehensive insurance are also limit options. Collision insurance, Reeves said,
is hitting anything other than an animal.
“If you hit a building, a car, a phone pole, a mountain, that is all collision insurance,” she said. “If you slide on ice and hit a telephone pole, that would be collision, but negligence is determined based in a claims adjuster deciding how at fault you were at the accident.So they may have some leeway given based on how they want to charge you for the accident. In Farmers, it is looked into.”
Reeves said she describes comprehensive insurance as “random acts of God” and are things that are unavoidable.
“God doesn’t like you,” she said. “Your windshield getting cracked, lightning striking your car, your car being keyed, theft, because those are things you can’t control. You can control your driving on the road though.”
-brittny.jo@aggiemail.usu.edu