How To Shop For Car Insurance

Determine the policy you need. While there are only a handful of nationally-recognized car insurance companies, A.M. Best, an industry credit rating firm, says there are about 450 insurers in the car business. The best place to start, experts say, is by getting an idea of what kind of policy you need and the kinds of companies you're willing to get it from. 

Compare companies. Now that you may have narrowed down the list, experts say price should be factor when selecting a company, not a determinant. Consider buying your car insurance from the same company as your homeowner's or renter's insurance. Many company offer discounts. 

Toggle your premium. Once you have settled on the terms of your car insurance policy, there are still opportunities to reduce costs. 

What not to do when shopping for car insurance:

• Don't skimp on coverage. It may be tempting to purchase only the minimum amount of liability required by law, but experts warn against this as accidents can cost way more than you could ever expect. Experts recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. You should also consider raising your liability coverage to protect your savings and assets from an accident in which you're at fault. You'll also need to purchase both collision and comprehensive coverage if you want to protect your vehicle from damages like falling tree limbs, hail, flood, fire, as well as from theft and vandalism.
• Don't wait for discounts. If you don't drive your car that often, some insurers offer usage-based insurance -- a sort of mileage discount that may save you up to 30 percent. But insurers can't know this unless you speak up. Even signing up for an automatic payment plan may provide a discount of up to 5 percent. Other discounts may apply if you belong to certain associations, install an anti-theft device in your car, or complete a defensive driving course. Ask! Ask! Ask!
• Don't buy the car, then shop for coverage. Experts recommend comparing insurance costs before buying a car, since the premium is based in part on the car's sticker price, repair costs, overall safety record and likelihood of theft. Even among similar cars in the same price range, premiums can vary widely.