Deciphering Car Insurance Quotes Before Buying

Deciphering car insurance quotes before you buy requires a little knowledge about auto insurance, state insurance laws, and your coverage needs. An effective way to decipher auto insurance quotes is to list the types of coverage with the premiums estimated for each type of coverage. This will give you a breakdown of what you can expect to pay for each level of coverage. If you’re ready to start comparing insurance quotes, enter your ZIP code below to get free quotes from local companies.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 30, 2020

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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare cheap car insurance quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

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The most reliable way of saving money on car insurance is to obtain at least three quotations – or estimates – before buying.

Unfortunately, figuring out what the insurance company quoted is necessary. Most people do not have the expertise in insurance to decipher the language and insurance offered.

One way of dealing with this situation is to purchase insurance through the agency system, since insurance agents must be licensed by the state.

Insurance agents and companies are subject to examination for continuing levels of education and expertise in insurance.

Be sure to always compare car insurance quotes before making decisions. Use our FREE tool above to get started!

Three ways of selling insurance are equally effective:

  • Independent agents – who represent several different companies and can give many different quotes.
  • Captive, or exclusive, agents – representing only one insurance company. They can give quotes only for that company.
  • Direct market sales – sold through the Internet, by mail, and telephone. The individuals who represent these companies must have licenses, too, but it is worth examining licenses.

Evaluating Quotes

To assess insurance quotes, you need to know about auto insurance, the insurance coverage to expect, and a general idea of expected prices. Go line by line on your quotes comparing prices for each.

An effective way of doing this is to list the types of coverage with the premiums estimated for each type of coverage.

In the United States, the annual average cost of car insurance was $907.34 in 2014.

Recognize that this average varies from state to state as well as the coverage you choose.

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Insurance Coverage on an Auto Insurance Policy by Line

Personal liability insurance is one of the most important policies when choosing coverage. The intent of this insurance is to meet state laws and provide protection for you and your family against the legal consequences of automobile accidents.

It is divided into types of coverage:

  • Bodily Injury Liability – Intended to pay for injury that you or a member of your family causes in an accident. Amounts are mandated by state law but usually $100,000 per person and $300,000 per accident is a reasonable limit for this coverage.
  • Property Damage Liability – Intended to pay for damage that you or a member of your family causes to property in an accident. State law also mandates amounts but $50,000 per accident should be enough.

This liability coverage is intended to pay for your legal liability if you have an accident. When discussing Bodily Injury Liability, the coverage extends to legal fees, rehabilitation costs, medical costs, and wrongful death assessments up to the limits of the policy.

You should note that increases in amounts of liability are relatively inexpensive once a certain limits have been reached; so higher limits will cost less than you expect.

Additional Coverage Sometimes Required by the State

The following coverage are relatively inexpensive, but valuable to your protection:

  • Medical Payments coverage – To help defray the costs of emergency transportation and treatment of you and your family up to the written limits. $5,000 to $10,000 is recommended.
  • Underinsured and Uninsured Motorists coverage – To protect you and your family from the costs of bodily injury caused by a driver that does not have automobile insurance. This coverage may be extended to hit-and-run accidents as pedestrians or bicycle riders. Considering that it is estimated that up to 17% of drivers on the road do not have insurance, this coverage is valuable. Limits are the same as those purchased under bodily injury liability, in this case, $100,000 per person and $300,000 per accident.

Physical Damage Coverage to Protect You Against Damage to Your Own Vehicle

This coverage has nothing to do with liability because it pays you and your lien-holder against damage to your vehicle. This coverage comes in two types of coverage:

  • Comprehensive coverage – pays for animal damage, theft, vandalism, fire, storm damage, broken windshields, and other damage not under the control of the owner.
  • Collision coverage – pays for damage to your vehicle when your car runs into another car, a building, a fence, or other fixed object.

Understand that physical damage coverage only pays for damage to your own vehicle. Liability for damage to others’ property is only covered through liability overage.

A way of reasonably saving money on insurance is to estimate how much the insurance company will pay should your automobile be totaled. Examine the Kelly Blue Book value for your vehicle to determine if the costs for physical damage insurance are higher than the amount you will recoup in a loss.


Liability coverage does not have deductibles, but comprehensive and collision do. A deductible is the amount you agree to pay in the event of a loss.

Set your deductible at a level you can afford. A deductible of $500 per loss is reasonable, but higher deductibles can reduce your insurance premiums.

Evaluating Quotes

List coverage at one side of lined paper. Here is a general pattern

Coverage Premiums-Auto 1: Premiums – Auto 2

  • Personal liability insurance:
  • Bodily Injury Amounts
  • Property Damage Amounts
  • Medical payment Coverage Amount
  • Underinsured/Uninsured Motorists Coverage
  • Physical Damage Coverage
  • Comprehensive Coverage
  • Collision Coverage
  • Deductible

Make a sheet for each insurance company from which you get a quote and total the premiums to compare. Subtract any credits and discounts the company may offer.

Credits and Discounts Available

  • Insuring auto and home with the same insurance company
  • Multiple vehicle discount
  • Protection – air-bags, anti-lock brakes, anti-theft devices
  • Drivers education courses and defensive driving courses
  • Special discounts offered by individual companies

Evaluate the Insurance Companies

The financial status and level of complaints accrued by the insurance companies providing quotes are important.

Financial situations of insurance companies indicate the company’s ability to address losses.

An insurance company with financial difficulty may not be as willing to settle claims generously than one that is solid financially.

Complaint statistics are collected by insurance companies and the ratio of complaints to premium written can indicate the level of service an insurance company provides.

The following sources of information can help you evaluate insurance companies:

  • Your state’s insurance website – a portion of the state government
  • National Association of Insurance Commissioners (NAIC) a national source for information about insurance.
  • A. M. Best Ratings – provides financial ratings for insurance
  • Standard and Poor’s Ratings

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Rate Your Quotes

Put together the premiums as well as the ratings for the insurance companies. Ask questions about coverage including the quality of parts the company requires to be used to fix your car in an accident.

Choose the insurance company with both the highest financial and complaint ratings as well as the lowest premiums.

When the policy arrives, make sure it is as ordered.

Plan on Acquiring New Quotes Next Year

Many of us assume that our insurance will stay the same, but it often doesn’t. You, as consumer, need to verify and ask questions at least once a year.

Use the FREE car insurance comparison tool at the bottom of this page to start your search today!

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