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Apr 13, 2021 10:41 AM EDT

5 Things to Ask a Car Insurance Agent

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5 Things to Ask a Car Insurance Agent

(Photo : 5 Things to Ask a Car Insurance Agent)

You've got your new (or new-to-you) car picked out, and you're ready to hit the road for your inaugural drive. But wait! First you need to get the car insured. 

While shopping around for insurance tends to be less fun than shopping for your new set of wheels, investing in the best car insurance is worth the time and energy.

Taking the time to find the best plan will help you protect your car and your bank account.

It's a smart move to study for a meeting with a car insurance agent the way you would a test. Essentially, that means the more prepared you are, the better results you'll get. Use this guide as a reference the next time you connect with a car insurance agent so you can make the most informed choice.

What is car insurance?

When you buy auto insurance from an insurance agency, you're entering into an agreement with them to protect your vehicle. On your end, you pay a monthly premium. On their end, they provide financial coverage. 

Auto insurance typically covers medical, property and liability costs in the event of accidents, theft and other events that damage your vehicle.

Different Types of Car Insurance

Car insurance comes in many forms, and most insurance plans include a combination of various types of coverage.

  • Liability insurance - legally required insurance that covers your legal obligation to others for property damage or bodily injury

  • Property coverage - covers costs associated with property damage, whether yours or someone else's, that occurs as a result of an accident

  • Medical coverage - covers medical expenses related to a car accident

Other types of coverage include collision coverage, comprehensive or full coverage insurance, uninsured or underinsured driver coverage, and personal injury insurance. 

How to Get Car Insurance

The start-to-finish process of finalizing an insurance contract will depend on which company you go with, but you can't go wrong if you follow this general outline:

  • Research how much liability coverage is mandated by government guidelines where you live. Different states require different coverage limits.

  • Figure out how much coverage you need -- it may be beyond the minimum required by law. You may have a brand new, expensive car that should have more coverage.

  • Shop around for plans in your area using a car insurance quote comparison service. You can easily compare insurance rates online.

  • Get in touch with an insurance agent at the company offering the plan that looks best to you. Find out what discounts you're eligible for and which companies offer those discounts.

  • Connect with multiple agents at multiple companies if you have your eye on more than one plan. Compare the same plan to make sure the price is actually comparable.

What to Ask When Talking to a Car Insurance Agent

There are a million questions you could ask a car insurance agent. But these are some basic questions that will help you understand exactly which plan you need and what you're getting out of the plans you're being quoted for. 

Be sure to ask any questions that come across your mind throughout the conversation, of course. It's best to have the utmost clarity on what you're signing up for before you agree to any contract.

Question 1 - Do I have the right amount of coverage?

Most states in America set a minimum liability coverage requirement. Minimums vary by state, but liability coverage typically includes damage to vehicles, injuries from car accidents, death, property damage and any legal fees incurred from an accident.

Once you've determined which plan covers the bare minimum, your agent can help you decide if you want or need additional coverage. For example, if you're a college student, you may need different coverage than if you're an older, retired driver.

If you finance or lease your car, the lender or dealership may require a certain type or amount of coverage. Ask your agent to give an estimate of how your add-ons, like collision, comprehensive or personal liability insurance, will look tacked on to your premium. 

Make sure you clear up what you'll pay out-of-pocket with each option as well.

Question 2 - Why is my premium so high?

Car insurance can definitely be expensive. There are some factors affecting your premium that you may not be able to or want to change, like where you live or the type of vehicle you drive. 

But whether or not you think your premium is too high, or you already have an understanding of what's affecting it, it's still worth knowing the specific details that factor into your premium quote.

Ask your agent to explain exactly what determines your premium. You never know; perhaps there's something on your driving record you can take a step to fix. Or there may be specials on certain plans that fit better into your budget. For example, college students can save on car insurance by asking for specific discounts.

Question 3 - What discounts do I qualify for?

You want adequate coverage without having to skimp on any necessities, but you probably also have a specific budget in mind. Be sure to ask your car insurance agent what types of discounts they offer. Maybe your employer or university works with certain insurance agencies, or you go with the insurance plan that offers a good grades discount.

As always, the best way to get the lowest price is to maintain an impeccable driving record by driving cautiously and obeying traffic laws, keeping an eye on your credit and researching which insurance agencies provide the cheapest coverage where you live.

Question 4 - What does my plan cover?

This may seem like a no-brainer, but it's perhaps the most important question to ask. Having clarity here is important for those times when you actually have to use your insurance. Does your plan come with roadside assistance if you get a flat tire or locked out of your car?

What happens when you get into an accident? How much will you pay out of pocket for your deductible? If your car needs to be repaired, does your insurance company pay for a rental? Are there limits on coverage and if so, what are they?

It's also worthwhile to know how to file an auto insurance claim with your insurance provider before you ever actually have to. Knowing your policy inside and out will ensure you're prepared in times of stress, like if you get into a fender bender or experience a car theft.

Question 5 - Does the policy cover gap coverage?

Gap coverage refers to insurance that will pay for the whole value of the car, even if your car is worth less than what you owe on it. This is standard for leased vehicles, but you may want to consider it if you have a car loan as well, which is fairly common. 

This type of coverage ensures you're not stuck with the bill if something happens to a vehicle you owe more on than it's actually worth.

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