What to Think About When You Compare Car
Insurance Rates

When shopping for car insurance, you want to find the best coverage for your dollar. Picking the right car insurance requires research, as well as an understanding of the products you're investigating—including what is covered, what your limits are and what your deductible is. Here are some factors to consider when making those comparisons.

A scale weighing an apple and an orange.

Does the insurance policy take care of your needs? When you're shopping for auto insurance, you need to consider what you need. All states have some minimum requirements, so naturally, you will need to make sure that you comply. If you have already paid off your vehicle and own it outright, your main considerations, besides state law, may be what you could afford to pay for in the event of an accident. In that light, you can decide on whether to purchase some of the optional coverages that are available. But, if you still owe money on your auto loan or if you're leasing your vehicle, you'll have fewer options to consider. Your lender or lease holder usually requires certain coverages, such as comprehensive and collision, in addition to liability coverage. When you're shopping for insurance, you should be aware of the requirements you must meet, as well as your financial needs.

Compare coverage and limit options. Insurance policies are not all the same. Before you choose an insurance policy, always compare coverage options. In some cases, you may find that the least expensive of the policies has much lower liability limits, meaning that if the damages from an accident exceed those limits, you may have to pay the difference yourself. You might also discover that a particular policy pays a lower amount in medical costs or requires you to pay a much higher deductible, both of which could mean more money out of your pocket.

Does the policy you're considering have comprehensive or collision coverage? Many lien holders will require you to have collision coverage; but, if you own your car outright, collision and comprehensive coverage are optional. Collision coverage protects you in the event of an accident, and comprehensive coverage protects you if your car is damaged because of reasons other than a car accident, like hail, fire or theft. When comparing policies, take into consideration the age and value of your vehicle and decide if you want collision or comprehensive coverage. If you do, you should make sure that the policies you are comparing have the same deductibles.

Deductibles can make a big difference in the cost of premiums. Deductibles make a big difference. Be sure that when you're comparing auto insurance costs, the deductible is the same across the board. For example, you may discover that the less expensive of the policies you're considering has a much higher deductible, or that the most expensive policy has a very low deductible. This could lead you to the false assumption that they're both the same, when in reality they're quite different from one another.

Make sure you understand the coverages and your limits before buying an auto insurance policy. Doing your research ahead of time will pay off in the end.

Looking for a car insurance policy? Get a quote from Allstate.com.

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Published: December 2012

The availability, qualifications and amounts of these discounts may vary from state to state. In addition, terms, conditions and exclusions not described above may apply, and total savings may vary depending on the coverages purchased. In some states, we may offer discounts that are not listed here. For more information regarding your eligibility for these savings opportunities, please contact your Allstate agent.

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