Car insurance: You’re (usually) required by law to carry it, so you might as well get the best possible deal, right? Unfortunately, there are so many players in the market today that finding the most economical solution for your situation takes a bit of legwork. With dozens of large, medium, and small-time insurance companies vying for your attention, how do you sort the good from the bad? The short answer to that question is to become an informed consumer, and not let salespeople be your only source of information.

First thing’s first: opting out of automobile insurance is really not an option. A few states may allow you to drive without insurance, provided you pay an uninsured motorist fee, but driving uninsured is akin to gambling with all of your assets and worldly possessions on the table. One bad accident and one aggressive injury lawyer can take you to the cleaners. In most states, of course, the law mandates a minimum level of insurance. Your county clerk will generally have information about state minimums.

Before shopping for insurance, you need to do a thorough needs assessment. How many vehicles do you need to cover, and who’s likely to be driving them? What’s the minimum amount of insurance that you’re comfortable with, regardless of state minimums? You need to strike a balance between the proper amount of coverage and a price that doesn’t break your budget. When you talk to an agent, therefore, you can negotiate from a position of knowledge rather than being swayed by the agent’s sales tactics.

The top tier auto insurance companies all work hard to entice new customers into the fold. Some, like Progressive, offer to give you a quote and compare it with quotes from other major companies. Be wary of such deals, however, because the company will naturally put themselves in the best light. In many cases, an online quote is simply a way to get enough of your information that a salesperson can hound you via email or over the phone.

Local salespeople are likely to offer you more appealing deals than an automated online system or a phone rep. Talking face to face, after all, is just a better way to do business. You may want to investigate the possibility of bundling all of your insurance into a single package, managed by a single company. The larger car insurance companies offer special pricing when you combine auto, home, and life insurance together.

Certain auto insurance companies have cornered the market on state minimum coverage insurance at cut rates. The old adage of getting what you pay for applies quite well to these companies. Many of these discount insurers will drop coverage after a driver’s first claim, regardless of circumstances, as a means of cost control. If your budget requires you to get minimum coverage at the lowest possible rate, then one of the discount insurers may be an attractive option; however, be sure to drive with extra caution. (more…)