In the past, car insurance was not a necessity, as some people accepted it and others did not. However, today, a car coverage policy is one of the crucial things in your life, if you own a car. People need adequate coverage, no matter how luxurious or modest their car is.
The way people buy insurance has also changed. In the past, buying car insurance meant just meeting with your neighborhood agent and asking. But now, it is something different, as you have many other options at your disposal from where you can insure your vehicle, with some completely new coverage options.
Buying Auto Insurance: Which Method To Choose?
When you want insurance for your car, you may be puzzled where you should get it from. Should you deal with an insurance agent or should you go online? You can choose from different options to get your car insurance. This includes:
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Buy from captive agents
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Buy from independent agents
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Online shopping
People who prefer personal services and like to build face-to-face relationships should certainly buy their policy from an agent. But, since there are different agents, they must decide which one is the best for them.
Among them, some are called “independent agents”, who sell insurance for numerous companies and some are “captive agents”, who sell insurance for a single company. Let’s take a look at the different characteristics of these agents, so that you can easily and quickly decide on the right agent for you.
1. Buy from captive agents
You must purchase your coverage from a captive agent, if you are engaged in a specific insurance company. Since captive agents deal with only one company, they will know about all the different insurance options that company offers. And so they can help you create the right package based on your needs. However, captive agents may take longer to answer your questions and understand your needs compared to freelance agents who work on commission.
2. Buy from independent agents
You should buy a policy from an independent agent, if you want to check the different insurances provided by different companies, as independent agents deal with multiple companies and not just a particular insurance company. This way you can get a better rate.
And, since independent agents are not directly employed by any company, they won’t be pushing a specific product and telling you the right things about all insurance. Therefore, independent agents can help you find affordable coverage for your car. However, since they work on commission, they are under more pressure to reach an agreement as soon as possible.
3. Buy online
The third option is to bypass insurance agents entirely and work directly with the company online. However, for this you have to do most of the work yourself. You should do a thorough research on the different coverage providers, what they offer, their insurance rates, and what all of their policies cover. You can then talk to the company that best meets your needs to get the coverage itself.
Among these, some insurance companies that employ agents do not require you to work with them and some of them do not employ agents at all. Buying car insurance online is one of the best options for you if you are short on time and want to get cheap car insurance, as it saves you from paying fees to an insurance agent. If you are unsure about your car insurance needs, then buying car insurance online, without an insurance agent, can cause you to buy the wrong, too little, or too much insurance.
Select your type of coverage
In addition to deciding which company to go with, you should also consider what policy you want. There are three main types of policies, including traditional, mileage, and usage-based auto insurance. So, take a look at these three auto insurance coverage programs before settling for particular auto insurance.
1. Traditional car insurance
In this type of car insurance, insurers determine the policy quotes with the help of various personal factors, such as your age, driving history, gender, credit score, etc. In general, the higher your risk as a driver based on these factors, the higher your insurance rates. In this, you can opt for a minimum amount of coverage according to state law or you can select from a long list of different types of auto insurance coverage.
2. Usage-based auto insurance
Unlike traditional auto insurance, where insurers show off your driving skills based on a list of different risk factors and your accident history, usage-based auto insurance providers offer you auto insurance seeing it in action in reality. In this type of car insurance, like Allstate’s Drivewise or Progressive’s Snapshot, you get a telematics device, which you have to plug into your car. This device records your driving and your driving behavior, especially your bad driving habits, such as accelerating or braking hard.
So if the device records that you are a low-risk driver, you can save money with usage-based auto insurance. However, if you record that you drive frequently late at night or that you drive fast, it will not help you save money with your car insurance. Also, many usage-based auto insurance programs are not available in all states. Therefore, if you are engaged in an insurance company, you may have to change companies, in case you move to a different state.
3. Car insurance per mile
Mileage auto insurance providers also use a telematics device, but they focus on only one thing, which is how little or how much you use your car. However, this type of auto insurance is still new and not available in all states. Among others, Metromile is the best car insurance provider per mile and is available in seven states so far which are California, Illinois, Oregon, Pennsylvania, New Jersey, Washington and Virginia.
Additionally, mileage providers use the same elements as traditional insurers to determine your auto insurance rates, but you can save some money through your telematics device. If you don’t use your car much and use it only for emergencies, your premium may drop significantly. However, if you normally drive your car, there is less chance that you will save money with it.
Shopping around
No matter how you buy your insurance, whether you’re looking for a dedicated agent or signing up directly with an auto insurance provider, you need to shop around for the best rates. Do some homework and don’t settle for the first deal that comes your way. This is because the rates for the same policy can differ from company to company by thousands of dollars. Therefore, comparing different auto insurance offers is the best way to get a good deal.