Auto Insurance 101 - How to Choose Your Car Insurance Wisely and Save

Step by Step: From Choosing Your Car Insurance To Filing Your Claim

Insurance adjustor filling out form for damage report on car
••• Zigy Kaluzny-Charles Thatcher/The Image Bank/Getty Images

Why do you need a five-step guide to auto insurance shopping? Because, if you want to get the best coverage for your money, shopping smart for your car insurance is the way to do it. Choosing the right car insurance is one of the top ways to chisel down your insurance budget if you know how to do it right. Understanding what makes a car insurance premium higher or lower, will also save you money on your car insurance costs. Sometimes even people with no claims might see their car insurance go up, so it helps to understand how to shop and get the best price.

Let's start with deciding what car insurance coverage you need:

1. What Kind of Coverage Do You Need?:

Before calling the insurance company and getting your insurance quote, take the time to decide what kind of coverage you need. In every state has minimum insurance requirements, so the basic coverage is usually liability insurance, some people refer to this as one-way insurance, but its always best to use the right terms to make sure you understand what you are getting. In addition to liability, you need to decide if you would like to add these additional car insurance coverages, click on the links to understand what each coverage will offer you:

If you choose comprehensive and collision coverages, you will need to decide what deductible amounts you would like. You can read more about using your deductible to save money on insurance here. And, it is important to know what policy limits your state requires so you can decide what policy limits you would like.

Other coverages you may also be interested in:

2. Choosing an Insurance Company:

When you are ready to select your insurance provider, besides just looking for the best car insurance premium, you will want to take some time to research what insurance company you want to go with by learning about their financial strength. This article may help: The Best Car Insurance for Price, Satisfaction and Claims

Another important aspect of choosing your insurance provider is knowing if and how they will use your credit score to determine your rate. Take the time to research different companies and then make a list of the providers you are interested in contacting for an insurance quote. You may also want to look at our list of the most expensive cars to insure, which has some great information on what might impact the cost of car insurance, and also Finding the Cheapest Car to Insure When Making a New Car Purchase

3. Making the Call:

When you have your list of selected car insurance providers you are ready to start calling around to search for the one who can give you the best deal. It is important to have certain paperwork handy, such as your driver's license number. In addition, having a list of discounts you may be entitled to can save you some extra money.

Examples of Some Discounts for Car Insurance

  • low mileage
  • winter storage discounts
  • professional, university degree, occupational or association discounts
  • good driver discounts
  • telematics discounts also known as Usage based car insurance discounts
  • green car - environmentally friendly discounts
  • alarm or tracking device discounts
  • retiree discounts
  • student discounts, or student away at school discounts

Here are some resources to help you when you are ready to make the call:

4. Understanding Your Car Insurance Policy:

Now that you have your car insurance policy, do you understand what it means? Did you get what you paid for? It is important to know how your car insurance policy works and how it can work for you. Here is some help in understanding your policy:

5. Filing a Car Insurance Claim:

Let's hope you never have to file a car insurance claim, but if you do it is important to learn some things before the accident comes. Learning what things you need to do when you have an auto accident can help the claims process go much smoother. Here are some claim filing tools you will want to learn before you file a car insurance claim: