If you’re in the market for car insurance, you’ve probably already heard the standard tips of comparing quotes and checking their service record on impartial sites. But what advice are you missing? What other steps can you take to ensure that you’re getting the best possible protection for you and your family? Here are four tips for choosing the right auto insurance company that you may not have heard before.
1: Protect Yourself In Case of Corporate Bankruptcy
What happens to your insurance policy if the company goes out of business? You might think they’re too big and successful for such an event to come to pass, but people trust their banks, too, and failed financial institutions have cost the U.S. over $1 billion since the year 2000. Look for an insurance company covered by the state’s guaranty fund: If something unthinkable happens to their brand, the fund will still pay your claims.
2: Ask About The Company’s OEM Policy
If you get into an accident serious enough to require extensive repairs, you have the choice of replacing your parts with either OEM (original equipment manufacturer) or aftermarket parts. Some insurance companies will only cover the cost of aftermarket parts because they’re so much cheaper than the originals, but OEM parts are often required to maintain your car’s resell value. So ask your insurers where they fall on the spectrum.
3: Look Into Gap Insurance
In the event of an accident or natural disaster, gap insurance exists to cover the difference between what the insurance company offers to pay and what you still owe on your car. For example, if your insurers will only pay $28,000 for a totaled car that originally cost you $30,000, and you still owed $5000 before it was fully paid off, that’s $7000 that you’ll be expected to cover. If you don’t want to eat large out-of-pocket costs because of your insurance company’s arbitrary limits, make sure you have gap coverage.
4: Pay Attention To Location
Because there are no national laws regarding auto insurance, premium costs tend to fluctuate depending on location, state requirements, et cetera. They can also change just by county: For example, if you’re living in South Caroline, the same insurance agency in Charleston might charge something different to your cousins living in Columbia. When choosing an auto insurance provider, never base your decision on the prices you’re quoted on the website or through an e-mail. Get on the phone and discover what they’re going to charge you specifically.