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Auto insurance is a method of pooling the risks of many drivers, so no one individual
has to bear the entire cost of an auto accident. Accident claims are paid from the combined
premiums of all insureds in the pool.
Selecting An Insurance Company
An insurance company sets rates partly on its own claims loss experience and partly on the
experience of the entire auto insurance industry. That means you can save money by comparing
companies and coverages.
- Keep notes on the types and amounts of insurance you are quoted. A good rule is:
Do not buy insurance for the losses you can afford. Use your limited premium dollars
to buy insurance to protect yourself against the losses you cannot afford. Some companies
return a dividend at the end of the year if their claims experience has been favorable.
Such dividends, in effect, lower the price of their insurance. However, check on the
company’s history of paying dividends. Dividends cannot be guaranteed.
- Research consumer publications, A.M. Best reports, and your state insurance department
for information on the quality of service a company provides, its complaint record and its
financial stability. Check with your state insurance department to see if they have done a premium survey.
- Consider whether or not you prefer working with a local agent or transacting business
over the phone or online. Also consider what payment plans are available. Policies are
generally issued for 6 or 12 months.
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A good rule is: Do not buy insurance for the losses you can afford. Use your limited premium
dollars to buy insurance to protect yourself against the losses you cannot afford.
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Auto
Insurance
Auto
Insurance