Comparing policy terms and conditions

Jan 5, 2005
Contributor: joel randon

Although automobile insurance policies are standardized to a certain extent, it's still important to compare policies in terms of price, coverage, exclusions, and the reputation of the insurance company. Some points to consider:

Shop around. You can get quotes from insurers either on their websites or by calling their customer service numbers. Make sure you compare several insurers so you can make sure you're getting the best deal.
Make sure you are comparing similar policies. You can't fairly weigh one policy against another unless you are comparing similar provisions and exclusions. Think about deductibles and limits of liability, as well as price.
Weigh the policy cost against coverage and service provided. When buying auto insurance, your goal should be to buy the best quality coverage offered will adequately protects you at a price you can afford. Each insurance company is allowed to set its own rates (within limits), and you may find that coverage at Company A might simply cost more than the same or similar coverage at Company B. You may also find that the premium you pay will be less if you buy multiple policies with the same company.
Evaluate the strength and reputation of the insurance company. It's important to buy auto insurance from a financially sound, reputable insurance company. You (or your insurance agent) should check the ratings published by one of several companies, such as A.M. Best, Moody's, Standard & Poor's, or Duff & Phelps. These ratings can tell you how financially sound an insurance company is.
Try to find out something about the claims-paying practices of the insurance company. Talk to your agent or any friends or family members who may have dealt with the company in the past. Does the company settle claims quickly? Does it refuse to pay certain claims? Does the company have a good reputation in the industry? These intangibles can be very important to your overall satisfaction with the insurance company.



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