Car insurance

Car insurance – protect yourself and your vehicle

Choosing car insurance can be as simple or as complicated as you want to make it. If you’ve already begun your search, you are probably well aware of that fact. With so many different factors to consider, including simply the challenge of understanding what coverage you need for your individual situation, it can seem overwhelming. That leads some consumers to just throw in the towel and choose whichever insurer has bombarded them with the most television commercials in recent months. You know that’s not a good choice, which is why you have found your way to this site.

At Plutigo, our goal is to help you navigate the car insurance process skillfully and avoid the overwhelm, letting you find the right coverage without making it a full-time job. But there’s no denying it, auto insurance has a lot of moving parts, so it will never truly be possible to boil it down to a single number that you can compare between all the different insurers. And whether you like it or not, car insurance is a very important decision—and expense—in your financial life, so it’s worth putting some effort into the process.

The two main factors: price and claims

If we have to break the whole process down to two main factors, and that’s not easy to do, then it would be price and claims service. Price is the part you deal with up front when you’re deciding which company and which coverage to select, and claims service is the part you hope you never have to deal with, but if you do, you want it to be top notch.

Price encompasses a lot of different elements, and this is where it can be difficult to make a simple apples-to-apples comparison between all the different insurers. The price you will pay is made up of options specific to you, which can vary extensively for different customers and different insurers. Here are just a few of the factors:

Some key pricing factors

Your age and the state you live in: E.g. rates for teens and college students are much higher than for 40 year olds.

How many miles you drive: If you commute 100 miles a day and take frequent weekend road trips, expect to pay more than someone who works from home and just drives to the local grocery store and gym a few times a week.

Your past driving record: If you have recent speeding tickets or accidents, your premiums will be considerably higher than if your record has been clean for several years.

The type of car you own, and where you live: A flashy new sports car in a big city will cost you more than a 20 year-old compact in a sleepy little town.

The specific coverage you choose: You need to think about questions like what size deductible do you want, how much total liability coverage do you need, do you want to have the insurer cover the cost of a rental car if yours is in the shop for a covered claim, and many more.

Discounts: Most insurers offer discounts off the standard price for a broad range of factors such as taking safe driving courses, having multiple vehicles insured, being accident-free, and even for getting good grades in school.

The type of pricing method you opt for: Some companies have added options allowing you to pay premiums based on the exact amount you drive, and how safely you drive, rather than a fixed monthly amount. With this "usage-based" pricing, your mileage and driving safety are measured by an installed tracking device that observes your every move, including whether you accelerate and brake smoothly, allowing you to receive great discounts—if your driving satisfies the device’s algorithms.

Claims servicing

Insurance is an unusual product. We pay for it and then hope we never use it. But when the day comes that we do have to file a claim, as it does for most of us, we want to know that our insurer is going to be helpful and efficient while it (hopefully) stands behind the promises we have been paying for with our premiums. When it comes to claims servicing, some of the important factors are:

The claim filing process: How difficult is it to file a claim and what channels are available (online portal, phone call to your individual agent, toll-free hotline, 24 hours a day, etc.).

Status updates: While the claim is in process, how well does the insurer keep you abreast of its status and by what method (email, text message, alerts in a mobile app, phone calls, etc.).

Ease of the estimation and repair process: How quickly and smoothly does this process go and does it require considerable time and effort from you.

Rental car replacement: If the policy includes rental car replacement coverage, is the process fast and easy, or does the insurer make it difficult for you.

Helping the customer feel at ease: Simply having a car accident can be highly stressful, making the aftermath of dealing with insurance also quite a challenge. There is no underestimating the value of the insurer doing everything possible throughout the claims process to be reassuring and help minimize this source of additional stress.

How to buy car insurance

The basic process for selecting and purchasing a car insurance policy boils down to a few key steps.

Determine the type and amount of coverage you need

This is actually one of the more challenging steps in getting auto insurance, because there are different components of a policy, and within those components there are typically different levels of coverage you can choose. Generally speaking, of course, the greater the level of coverage, the higher the premium will be.

Your choice of coverage levels should be dictated by such questions as:

• The value and type of the vehicle
• Your ability to pay for uncovered expenses
• The level of personal or business assets you need to protect in the event of liability
• The monthly premium amount your budget will allow you to pay

Clearly the right choice of coverage is highly dependent on your individual situation. Hence it’s not a great idea to try avoiding this question and simply copy what your friends or family members are doing; their situations could be very different from yours.

The major components of a car insurance policy include:

Liability coverage: Liability coverage is required in most states, and it helps pay for others’ expenses if you cause an accident, i.e., if you are liable for the accident. There are two types of liability coverage, bodily injury and property damage, with most states requiring drivers to have both types. Bodily injury helps pay another person’s medical expenses if you cause an accident, and property damage helps pay for damage you cause to another person’s property. As a general rule, if you have a high level of wealth or assets, you should probably opt for significantly more than the minimum required amount of liability coverage. A catastrophic accident could cost far more than this minimum, and it could drain away everything you have worked so hard to accumulate.

Comprehensive coverage: Helps pay to repair or replace your vehicle in the case of theft, or different types of damage, including extreme weather, animal damage, vandalism, flood, and fire. This coverage is typically optional, but if the vehicle is leased or has an outstanding loan balance, the financing company usually requires you to carry comprehensive.

Collision coverage: Covers damage to your own vehicle after an accident, regardless of who was at fault. (Note that damage to another person’s vehicle would be covered by your property damage liability.) Similar to comprehensive, collision is typically optional but usually required if your vehicle is leased or financed.

Medical payments and personal injury protection: Required in some states, it covers medical and rehabilitation expenses if you or your passengers are injured in an accident. In some cases it also covers related expenses like child care and lost income resulting from an accident.

Uninsured/underinsured motorist coverage: Helps protect you against drivers that cause an accident with you but either don’t have insurance or have insufficient coverage levels to pay for your full damages.

Rental reimbursement coverage: Helps pay for a rental car if your vehicle is being repaired after a covered loss.

Gap insurance: If there’s an accident or damage that totals your vehicle, gap insurance pays out the difference between the car’s actual cash value and the amount you still owe on a lease or loan. This coverage allows you to avoid having to continue making payments on a vehicle you no longer own.

When discussing car insurance—and it’s always a favorite topic of conversation—you may hear people use the term “full coverage.” It would be nice if this phrase represented a product choice you could opt for, allowing you to have exactly the full coverage you need without having to make any individual choices. Unfortunately that’s not the case because there is no official classification of “full coverage.”

What people most likely mean when they say this is the particular combination of the above types of coverage that one chooses to protect a vehicle, but it does not refer to an official, pre-defined combination of them.

Get a few quotes to compare

In order to get the right car insurance, there’s no replacing a little bit of effort to shop around. You need to get a few quotes from different insurers in order to allow you to compare. You want to compare both price and service, including the claims service discussed above. The few hours you invest in this process on the front end can pay huge dividends over the many years you may have the policy, in terms of both premiums and peace of mind.

The different ways to get quotes, including online and through agents, are discussed in the next section. And the companies from which you should get quotes can come from diving into our company reviews, as well as the many other resources and rankings available at sites like Trustpilot, Consumer Reports, etc.

Once you have decided on a small group of perhaps 3 to 5 insurers that impress you as providing the best service for your needs, you should count on spending about 15 minutes per quote. In order to be most efficient, be sure to have your most recent policy information in hand, because there may be questions about the make and model of your vehicle, as well as your current coverage. You should be requesting quotes for the same amount of coverage from each, so you can do an apples-to-apples comparison.

Don’t forget to ask about discounts, because there could be a number that apply to you, including:

• Low annual mileage
• Anti-theft and safety devices
• Defensive driving courses
• No accidents or moving violations (typically for the past three years)
• College students who live away from home
• Student drivers with good grades
• Multiple cars
• More than one policy with the same insurer

If your budget is extremely tight, you may find that every quote you get is simply too high. In that case, all is not necessarily lost. You could consider raising your deductibles, which often brings premiums down quite a bit. Also, if you have included optional comprehensive and collision, and their annual premium exceeds 10% of the value of the vehicle, you should strongly consider dropping them. If for example you are quoted a $500 annual premium for these two coverages and your car is only worth $3,000, industry experts would suggest they are not a good value.

Choose the way you want to buy

In today’s world there are many ways you can get car insurance quotes and make your purchase, it’s totally up to you how you want to go about it. You might want to try more than one option and see what you’re most comfortable with, because each has its strengths and weaknesses.

Captive insurance agents

Working through a “captive” agent for quotes and purchases can probably be called the old-fashioned method these days, though that’s not to imply there’s anything wrong with it. A captive agent works exclusively for a single insurance company and thus becomes your point of contact with the insurer. The larger insurance companies, such as State Farm and Allstate, have networks of these exclusive agents throughout the country.

Captive agents often focus on developing long-term relationships with clients, and they work on commission, meaning they have plenty of incentive to make a sale to you. They are great if you are a bit unsure and want someone to help guide you through the process of choosing the coverage options you need. In addition, if you need multiple types of insurance, not just auto, they can provide that for you all under one roof, which is a convenience many people seek out.

The primary downside of captive agents is that they can only sell the policies offered by a single insurance company, which severely limits your options. It also makes it more time-consuming to get quotes from multiple companies and compare, as we highly recommend.

Independent agents and insurance brokers

An independent agent is nearly identical to a captive agent but is not limited to representing only one company. Instead independent agents are able to sell policies from many different insurers, making it a one-stop shop for multiple quotes from the various insurers the agent does business with. However, independent agents do not have access to insurers that use captive agents (like State Farm and Allstate), and you may want to get quotes from these companies as well. Fortunately many large and small insurers, including Travelers and American Family, do sell through independent agents.

Relative to dealing with captive agents, independent agents make it easier to comparison shop in order to find the right policy for your needs. A key point to remember with both independent and captive agents is that, because of their commission structure, they may have incentive to upsell you on unnecessary policy add-ons, so you have to be alert and able to say no to their sales pitch.

An insurance broker effectively provides the same service as an independent agent, with the key difference being that they are required by law to disclose to you their commission rates. In addition, they may charge additional service fees on top of their commissions.

Go online for direct quotes

If you prefer not to deal with an agent, your best bet is to go online, where you can get quotes and even make your purchase directly. Auto insurance quotes on the internet have become big business, and the process is quite straightforward with the help of so-called “lead generation” sites. These sites can provide you with multiple quotes at one time, allowing for a simple comparison process. Plutigo is one of these types of sites. You may scroll to the top of this page, tell us about yourself, and see car insurance provider options you qualify for.

In addition to the lead generation websites, if you are interested in particular insurers, you can usually go directly to their websites and get quotes directly, tailored to your coverage choices. After getting quotes from multiple companies in this way, you can create your own comparison in order to move toward making a final decision.

The process of getting online quotes is fairly uniform across all types of sites. You input information about yourself, your car, and your driving situation, and then make your coverage choices from an easy-to-use menu on the screen. You then get your quote(s), either individually on insurers’ websites or all on one screen on our site.

Nonstandard car insurers

Car insurance is difficult to get if you have major blemishes on your record, including recent tickets, accidents, DUIs, or lapses in coverage. Fortunately, there are some insurers that specialize in covering the higher risks that come with these kinds of drivers. In fact, you may have seen television or billboard advertisements for companies targeting exactly these drivers.

If you’re in this category, you should expect to pay a higher premium in order to get the level of coverage you need. It may be maddening, but it’s reflective of how insurance markets work. Premiums are based on risk levels, and every customer represents a different risk.

Compare your quotes and make a choice

Congratulate yourself, because you’ve done all the hard work that so many consumers won’t, meaning you will get a better combination of price and quality than you would if you had taken the easy way out.

With the quotes now assembled, the process of comparison should be fairly straightforward. Because you have gotten all the quotes for the same level of coverage, you are able to make an apples-to-apples comparison.

Just remember, the decision is based on more than just price. If you have a quote that is slightly higher priced but it’s from a carrier that has higher customer ratings and a better claims reputation, that very well could be your best quote. You have done all the rational, quantitative work to get to this point, and now it may be time to let your gut weigh in. If the company that is 3% more expensive has given you more assurance that they will be there for you when you need them most, then that may be the right choice. Trust yourself, because you’ve earned the right to choose.