What to Do When Dealing With Car Insurance Companies?

All 50 states have laws requiring that drivers be financially protected by a minimum amount of auto insurance, specifically liability coverage. This coverage protects the driver financially in the event that he causes damage to another party and is legally liable for it. This insurance must be bought on the open market from private insurers. Drivers should keep several strategies in mind when shopping for insurance to ensure they get the best rate.

Compare Prices

Each insurance company uses its own risk model when determining how much to charge for coverage. These models attempt to estimate the likelihood that an individual will bring a claim against the insurance company. Riskier drivers pay higher premiums. It is worth it for drivers to apply to a number of different insurance companies, as each company will assess relative risk differently, meaning that the premiums quoted may vary.

Ask About Discounts

Many auto insurance companies offer a variety of discounts to individuals who qualify. For example, many insurance companies offer discounts to members of AAA or, in the case of students, to those who receive higher grades. This is because these groups of people are considered to be at lower risk of bringing a claim against the company. Companies will not always mention these discounts, so it behooves the shopper to ask about them.

Consider Bundling

In some cases, an insurance company will offer not just auto insurance, but other types of insurance as well, such as homeowner's insurance. Often, the insurer may be willing to offer the individual a discount if he purchases two or more types of policies. This is known as bundling. It may make sense for an individual to check with any company currently offering him insurance about whether it has any deals available for auto coverage.

Be Honest

When a person takes out an auto insurance policy, he will generally be required to fill out a questionnaire about his driving history, the car being insured and other information. While a person may be tempted to lie when answering these questions -- for example, he may wish to not report an auto accident in which he was involved -- he should not do so. An omission may void his coverage at a later date.