Car Insurance - Evaluation

Evaluate how well Car Insurance meets your needs and compares to competing products

If you've completed step one you've identified what you need in car insurance and you've learned about the different features of car insurance. While you were doing your research, you probably started the process of determining which features - and thus which type of car insurance - will best meet your needs. Now you are going to continue that process, but in greater detail.

In this step you will evaluate the choices available on the market to determine how well they meet your personal needs and establish, by a process of elimination, an initial short-list of contenders. Then you will compare these short-listed car insurance to find out which ones stand out from the competition.

Evaluate how well Car Insurance meets your needs

Your priority at this point in your evaluation is to find the available car insurance in the market that best meet your needs. You can save a lot of time during this activity by quickly eliminating any options that are unsuitable because they don't meet your key requirements. For example, if you have a limited budget for this purchase then you can ignore any car insurance that clearly exceeds your price limit.

Don't make the mistake of thinking that just because your vehicle is off the road, you don't need any insurance to cover it. A vehicle is one of the most expensive things most people will ever own, and even sitting parked for a period of time it is still vulnerable to damage. The only time you don't need to have your car insured is if it's not being used and it's either parked on a private driveway outside your house, or in a garage. However, if it's stolen or damaged, obviously it's not covered and you'll have to pay for any repair or replacement costs.

Comprehensive insurance covers against damage not incurred in a collision, and is advisable for any vehicle owner. Unfortunately, comprehensive coverage is generally the most expensive type of insurance - although young drivers under 25 tend to have third-party insurance only, as it's all that they can afford.

Tip: Make sure you read the agreement stipulations when purchasing insurance. In the case of used cars, the premiums charged for comprehensive might not be worth it. Coverage usually only includes up to 80% of the value of the car based on the insurer's estimates.

Third-party fire and theft is an excellent option for any driver if the car isn't of particularly great value. After all, you're hardly going to pay insurance that's equal to the value of your car - it'd be just as cheap to write an older car off and buy a new one.

Tip: It's always worthwhile checking the insurance Terms & Conditions when deciding whether you need comprehensive cover or third-party. Although new regulations in insurance markets mean that comprehensive means exactly that, and that everything is covered, there are still some policies where this isn't the case. In fact, some insurers may only cover up to 80% of the cost of repair; with you expected to cover the rest (also known as excess).

An overlooked part of vehicle insurance is that which covers medical bills. Medical payments can add up very quickly in an accident situation, and you should have insurance that covers bills incurred both by you and by passengers in your vehicle. General liability insurance will cover medical for people in other vehicles in some countries; in other countries you will need to take out some kind of third-party injury coverage. Make sure that you know the full value your insurance covers and if there are any excluded conditions or circumstances.

Tip: Purchase the plan that offers the most coverage in terms of medical payments, that you can reasonably afford. If you are travelling to another country and you wish to drive anywhere, it's always better to hire a car in that country and take out insurance cover for that particular occasion. You can certainly take your own car and arrange travelling insurance, but this could limit what insurance options are open to you. For example, if you don't have comprehensive cover on your insurance premium and you're involved in an accident abroad, you may not be covered. At least with a hire car and their insurance policy, you'll usually be fully covered for the use of the vehicle while in that country.

Another important type of insurance is that which covers you in an accident with a motorist who is either uninsured (UM) or underinsured (UIM). There are hundreds of drivers who do not carry enough coverage on the roads, and an accident with one means that you will not be able to recoup your losses, even if you are not at fault. Underinsured coverage protects against this occurrence and is not very costly.

Each company offers ways in which you can lower the amount you have to pay for insurance, and these are very much worth exploring. Your driving record is one way; check to see which companies offer discounts to drivers with a good record of accident free driving, as well as limited speeding tickets.

Many insurers offer what's known as a “no-claims discount” - this usually means having not made a claim on your insurance premium for a period of 1 to 4 years. Depending on the length of no claim, the discount can be anywhere up to 75% off your overall premium.

Theft is a major concern for all insurance companies, so any measures that can be taken to protect a vehicle will be a major plus in deducting costs from your overall plan. Anti-theft systems always earn a discount; the more sophisticated the better. Keeping your car locked up overnight in a garage will help bring your premiums down, as will having an immobiliser installed. This stops a car from starting unless your specific key has been inserted into the ignition.

The area you live in can also dictate how much it is to insure your car - inner cities are normally more expensive than suburbs and city outskirts.

Tip: Theft discounts are not just determined by the equipment. Some cars are higher up on the target list of thieves, as they are easier to steal than other models. These will have higher comprehensive payments, as will insurance for cars that are driven or parked in larger cities.

There are some circumstances where you will have to pay a higher price for insurance no matter how many precautions you take. Male drivers under the age of 25 are more likely to get in an accident than any other demographic, and the insurance companies compensate by charging higher rates for these drivers. Of course, drivers can overcome this by getting married, as married men under 25 are less likely to get in accidents than their single cohorts!

Unfortunately, there will always be times when it doesn't matter what you do - you'll still be charged a higher premium. If you're under 25, you'll generally pay more for your car insurance; if you're under 25 and male, this figure grows again, due to the fact that this demographic is the most “at risk” when it comes to accidents.

Tip: Heavier vehicles sustain less damage in an accident than lighter ones, and thus are also less costly to insure both for collision and medical payments. They may cost more when it comes to general liability.

One major consideration for car insurance is the customer service reputation of the company. Some insurance companies are completely online agencies, whereas others are more traditional and have agents that will come to your house or business to complete purchases of insurance. Depending on your situation and level of comfort with online transactions this could be an important factor. There may be a slight cost saving to online agencies as they have less overheads and may be able to pass the discounts on to you. Many people like to personally be able to meet and speak with their agent face to face, and if this is important then make sure there is an agent located in an area close to you.

With the increasing popularity of the Internet as a place of business many insurance companies now offer the option of arranging your policy online. In fact, there are some companies that are now solely Internet-based. While this may take away the “personal touch” of speaking face-to-face with an advisor or broker, it does offer the advantage of saving you money and giving you greater choice.

Because you can check all companies at your leisure, there's also no need to worry that you've been sold something you didn't want. You can make the decision; you can compare literally hundreds of companies; and you can even make a bespoke package that's right for you. Taking the time to compare quotes and companies online can make a big difference to the cost of your insurance.

It is essential to make sure that you have as much insurance as you can afford. Too little insurance can cost huge amounts if there is ever an accident or other damage to the vehicle. It is also important to stay within budget to make sure that all premiums are paid fully and on time. A good balance is to purchase a policy that offers you the most for your budget amount but then gives the policyholder the option to increase their coverage at a later date with no penalty or additional set up fees. Most companies will offer this option if you stay with them for a set period of time. Evaluate the time frames before these additional features become part of the policy, as there are differences between companies.

When you were considering your requirements in car insurance it's likely that you singled out certain factors such as policy type, discounts available, coverage offered and cost as being of major significance. As with so many other products, the more features offered, the higher the price. Buyz123 has created a checklist containing examples of major features; you can work from this checklist when evaluating how well various car insurance meets your personal needs:

Features Checklist

Types

• Comprehensive - non-collision damage (fire, vandalism, Act of God, storm, theft), 80 to100% of the car's value
• Collision - damage in an accident, covers cost of repairs and legal expenses
• General Liability (Or third-party coverage) - damage to other cars, people, property
• Medical payments - medical bills, rehabilitation, and legal expenses
• Insurance shortfall - underinsured (UIM), uninsured (UM)
• No-fault - threshold, mandated benefit levels

Price determinants

• Age - 16 to 24, 25 to 64, 65 and over (dependent on country and state)
• Gender (special discounts for female drivers)
• Relationship - married, single
• Driving record - accident history, speeding tickets, years of accident free driving
• Use of vehicle - work, vacation, average daily or annual distance
• Vehicle - make, model, modifications, age, weight
• Location - an area of high claims for the insurer
• Occupation - employment history
• Lifestyle characteristics
• Credit rating
• Prior insurance cover history - cancelled or non-renewed

Discounts/Minimize premiums

• Shop around - get at least three quotes
• Get quotes from insurance companies and insurance agents
• Include more than one vehicle on the policy
• Pay on an annual basis, unless no penalty for monthly payment
• Safety features - anti-lock breaks, air bags, seat belts
• Anti-theft - alarms, immobilisers, car garaged overnight
• Contracts - DUI agreement
• Company - same company for all insurance needs
• Discount rate available with your current house insurer
• Check for discount available to groups with which you are affiliated
• Driving record - 5 to 10 years accident free (20 to 60% discount), 1 free accident
• Deductibles - increase can lead to lower rates
• Courses - defensive driving and advanced driving schools and courses
• Limited mileage - less than 7500 miles travelled per year
• Check to see if off-street garaging will help

Considerations

• Is 'new for old' coverage an option
• Coverage for rental car whilst own car being repaired/replaced
• Rates available for over 50's
• 'Gap coverage' - you could owe more than vehicle is worth - happens if you lease or down payment is less than 15% to 20% - vehicle depreciates immediately as it leaves the showroom
• Are manufacturer's genuine parts used, or generic
• Does it cover glass breakage

Additional Insurance

• Travel - out of state, out of country
• Emergency - towing, key recovery, repairs
• Contents - home insurance

There are a lot of features listed here, and some of them may not be relevant to your particular requirements. So, work your way through the list and assess how each of these features impact on your needs. You can then create a personalized checklist of the features you really require in car insurance.

Once you have finished evaluating the car insurance available in the light of your personal needs and arrived at a short-list of 'possibles' you are ready to progress to the next stage. This involves comparing the car insurance one-on-one in order to find those that really stand out.

Evaluate how well Car Insurance compares with competing Car Insurance

Comparing the items on your interim short-list, one to another, is an important part of the purchasing process - we all want to buy the best product we possibly can. So once you have established a short-list of car insurance policies that meet your needs it is time to evaluate how well they compare in fine detail. This way you can assemble a select list of policies that stand out from the crowd.

Questions to ask yourself:

Which car insurance on my short-list offers the best value for money?
Which policy best meets my needs?
Which car insurance is the easiest to pay for?
Which of the car insurance has he best extras?
Which short-listed car insurance has the best medical coverage?
Which car insurance do I like best?

By answering these simple questions, you are actually eliminating car insurance that isn't absolutely right for you.

Once you've worked through the Evaluation step you will have a final short-list of car insurance that meets your needs and stand out from competing products on the market. It's time then to move on to the third and final step: Purchase.


Video Links

Buyz123.com Research Links:

Pricing

The price of car insurance - can you save money?

Reviews

Reviews of car insurance companies