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As a licensed property and casualty (auto & homeowners) insurance agent in Florida for more than nine years, I felt qualified to offer some advise on auto insurance:
This is a major purchase and required in most of the country. It is also a necessary evil if you will. Because it is a major purchase, shop for it like you would any big dollar item.
Compare, compare, compare. Companies, prices, coverages. Go for the names you recognize, ask friends for referrals, check resources like AM Best (available at your library) who grade the companies on all aspects of how they run their business, claims service, profitability, etc. They are like the "Consumer Reports" of insurance, impartial to any one company. Shop for your insurance the same way you did your car. You went to different lots (companies) and COMPARED prices, features, downfalls, benefits, etc. When you are comparing, make sure you are getting quotes on the same coverages and giving all the companies the same information regarding the drivers, their histories, and the particular car(s) involved.
This will save you a lot of frustration. Don't try to hide tickets, accidents, claims, etc. The insurance Big Brothers are all in cahoots and THEY WILL FIND OUT ABOUT EVERYTHING!
Deductibles are the amount of money you pay before your insurance will shell out a single dime. The higher your deductible (pain threshold), the lower your premium payments. Deductibles lower than $500 are rapidly becoming a thing of the past, and for good reason: They eliminate small claims. It costs the company just as much money to manage a shopping cart hitting the side of your car as it does to cover the fact that your teenager hit a parked Porsche. Caution, though! Most finance and leasing companies won't let you have anything higher than a $500 deductible. But if you own the car outright and it's still valuable, a $1000 deductible can save you quite a bit of money. Another word of caution (aka The Flip Side of the Coin)! Don't take a deductible so high that you can't manage it at claim time.
Example #1: Single mom takes a $1000 deductible to save $200 a year. She wrecks the car and has to come up with the $1000 to get the car out of the shop or feed the family for the next 3 months. She's going to be in a real bind!
Example #2: Joe Single Guy with a Six-figure Income has a $1000 deductible and has just wrecked his prized Masarati. He has to come up with $1000, too. But chances are good he has it tucked away for his three-week winter ski trip. Guess he'll have to cut it back to 10 days instead.
Part of my job is to "remind" people that their payments are due. I recently took a claim from a man that was something like this. He was the head of household, blue collar. Wife and two kids, ages 4 & 7. He was calling from the hospital to report the claim that went something like this: Wife was taking 7 year old to school. She lost control of the car and it rolled. No one in the car was wearing a seatbelt. Injuries as follows: Wife: broken leg, broken hand, broken elbow. Seven-year-old: broken leg and broken jaw. Four-year-old: 2 broken legs. The vehicle was totaled. Ten days prior to the accident, the husband had given the wife the $150 monthly payment to drop off to the insurance company; she forgot to. Instead, she spent it on something else. (After Christmas sales, I believe.) Anyway, the payment was never made, so the insurance had terminated. There was NO COVERAGE. No health insurance either. The medical bills for the 3 of them will easily exceed $100,000, not to mention there is no money to get a replacement vehicle. All this right before the holidays. If she had only dropped off the payment on time.
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