It’s a great practice to shop coverage around at least once a year because prices change regularly. Just because you had the lowest rates a year ago you can probably find a better price now. Starting now, forget all the misinformation about auto insurance because it’s time to teach you one of the easiest ways to find better rates and still maintain coverage.
If you have insurance now or need new coverage, you can learn to cut your premiums and possibly find even better coverage. The purpose of this article is to help educate you on how to effectively get price quotes. New Jersey vehicle owners just need to know how to compare rates online.
Lots of discounts mean lots of savings
Insurance can cost an arm and a leg, but there could be available discounts to help bring down the price. Some trigger automatically at quote time, but less common discounts must be asked about prior to receiving the credit. If they aren’t giving you every credit you qualify for, you are paying more than you should be.
- Seat Belts Save more than Lives – Requiring all passengers to use a seat belt could cut 10% or more on the medical payments or PIP coverage costs.
- Drivers Education – Make teen driver coverage more affordable by requiring them to enroll in driver’s education in school.
- E-sign – A few companies give back up to $50 for buying a policy and signing up online.
- Accident Waiver – Some insurance companies allow you one accident without raising rates as long as you don’t have any claims prior to the accident.
- Bundle and Save – If you have multiple policies with one insurance company you may save 10% to 20% off each policy.
- Discount for New Cars – Putting insurance coverage on a new car can cost up to 25% less compared to insuring an older model.
- Fewer Miles Equal More Savings – Low mileage vehicles can earn discounted rates on garaged vehicles.
- Discount for Good Grades – A discount for being a good student can save 20 to 25%. Earning this discount can benefit you up until you turn 25.
- Safe Driver Discount – Drivers who don’t get into accidents may receive a discount up to 45% less than drivers with accidents.
Consumers should know that most of the big mark downs will not be given to your bottom line cost. Most only reduce the cost of specific coverages such as collision or personal injury protection. So even though they make it sound like you would end up receiving a 100% discount, auto insurance companies aren’t that generous. Any qualifying discounts will bring down your premiums.
Auto insurance coverage basics
Understanding the coverages of a auto insurance policy can help you determine the right coverages at the best deductibles and correct limits. The terms used in a policy can be ambiguous and nobody wants to actually read their policy.
Liability coverage provides protection from damages or injuries you inflict on other’s property or people. This coverage protects you against claims from other people. Liability doesn’t cover damage to your own property or vehicle.
Liability coverage has three limits: bodily injury per person, bodily injury per accident and property damage. As an example, you may have policy limits of 100/300/100 that translate to a limit of $100,000 per injured person, a limit of $300,000 in injury protection per accident, and a limit of $100,000 paid for damaged property. Occasionally you may see a combined single limit or CSL which limits claims to one amount with no separate limits for injury or property damage.
Liability coverage protects against things such as loss of income, funeral expenses and structural damage. How much liability should you purchase? That is a decision to put some thought into, but it’s cheap coverage so purchase as large an amount as possible. New Jersey state minimum liability requirements are 15,000/30,000/5,000 but drivers should carry better liability coverage.
Medical payments and PIP coverage
Coverage for medical payments and/or PIP kick in for immediate expenses for doctor visits, chiropractic care and prosthetic devices. They are often used in conjunction with a health insurance policy or if you are not covered by health insurance. Coverage applies to not only the driver but also the vehicle occupants in addition to getting struck while a pedestrian. PIP coverage is not universally available and gives slightly broader coverage than med pay
This coverage covers damage to your vehicle resulting from colliding with an object or car. You will need to pay your deductible and the rest of the damage will be paid by collision coverage.
Collision can pay for claims such as sideswiping another vehicle, rolling your car, crashing into a ditch and backing into a parked car. Collision coverage makes up a good portion of your premium, so consider dropping it from vehicles that are older. It’s also possible to bump up the deductible to bring the cost down.
Comprehensive auto coverage
This coverage pays to fix your vehicle from damage from a wide range of events other than collision. You need to pay your deductible first and the remainder of the damage will be paid by comprehensive coverage.
Comprehensive coverage pays for claims like fire damage, rock chips in glass, hail damage and hitting a deer. The maximum amount you can receive from a comprehensive claim is the actual cash value, so if the vehicle’s value is low it’s not worth carrying full coverage.
UM/UIM (Uninsured/Underinsured Motorist) coverage
This coverage provides protection when the “other guys” either have no liability insurance or not enough. It can pay for hospital bills for your injuries and also any damage incurred to your vehicle.
Since a lot of drivers carry very low liability coverage limits (New Jersey limits are 15/30/5), it only takes a small accident to exceed their coverage. This is the reason having UM/UIM coverage is important protection for you and your family. Normally these limits do not exceed the liability coverage limits.
More resources for learning
Additional auto insurance information can be read on the New Jersey Department of Banking and Insurance website through this link. New Jersey consumers can learn about specific coverages, find a variety of consumer forms, and report car insurance fraud.
Online plus local equals savings
Cheap auto insurance is available from both online companies and also from your neighborhood Atlantic City agents, so you should be comparing quotes from both to get a complete price analysis. There are still a few companies who may not provide the ability to get a quote online and usually these small insurance companies provide coverage only through local independent agents.
Drivers switch companies for a number of reasons such as delays in paying claims, poor customer service, unfair underwriting practices or not issuing a premium refund. Whatever your reason, switching auto insurance companies can be easy and end up saving you some money.
As you shop your coverage around, make sure you don’t skimp on coverage in order to save money. There have been many situations where someone dropped liability limits or collision coverage only to discover later that they should have had better coverage. Your goal should be to purchase a proper amount of coverage at the best price, not the least amount of coverage.