Auto Insurance, Policy Assets, and Customer Assistance by: Kinney Dancair

One morning a friend of mine was running late for class at school. His wife was throwing together some kind of breakfast while he gathered his laptop, notebook, and picked out the books he was going to need for school that day. He zipped up his pack and ran outside to warm the car up. Except, there was no car. It had been stolen. My friend ran into one disappointment after another that week as he first found the insurance company wouldn't pay for a rental, then that the damage the thief did to the car would only be covered up to the deductible and that somehow he was going to have to come up with the 500 dollars before the car could be fixed.

He had supposed he had done due diligence by going to one of those car insurance quotes sites and finding the lowest priced quote. He had thought by getting cheap car insurance he had beat the system somehow. In reality, his cheap car insurance turned out to be crappy car insurance. His problem stemmed from a lack of information about his car insurance.

Before you buy your next auto insurance policy be sure you know all of the facts about the company's service policies. Cheap car insurance is only cheap if the product is as good as the more expensive car insurance. A good place to start is with a free car insurance quote, however obtaining an auto insurance quote is not going to be enough unless you know what kind of service you expect and whether or not the company quoted will provide it. The two A's will keep you straight. They are, Assets and Assistance.

Assets

You want to make certain that your car insurance quote includes every asset you could want or need in an emergency. When you are high and dry without a car, will your insurance cover your transportation needs? Check to make certain that the company you are buying car insurance from will provide you with an auto rental if something goes wrong. If your car is stolen--as my friend's was-- undrivable, or in the car repair shop for a few days you want to make certain that a car will be available to you. If not, you will be forced to call your in-laws and give them one more reason why you aren't good enough for their daughter. Check that you have road-side assistance, some variation on lock-out service, and towing service provided by some insurance company. Remember the car insurance quote is only low if the car insurance product is good.

Assistance

Find out what the auto insurance company's customer service is like before you buy from them. How do you find out something like that? First, there is no way to know for certain what type of people you will end up dealing with, but there are ways to know the probability of having a good experience. First, there is the low tech way of asking your family and friends what their experiences have been. The lemon auto insurance companies will immediately pop up in a network search of that kind, but let's say that you are a hermit and have no family or friends, or like one friend of mine, your family is all from the catskill mountains without cars or running water. If that is the case then you will need to try the high tech method: use the internet. One way is to make use of the Better Business Bureau's search engine. At www.betterbusinessbureau.org you can find if any complaints have been registered against the auto insurance company in question and whether or not the company has resolved those complaints. I have checked the auto insurance companies that have treated my family poorly and they all seem to have a complaint--not made by me--against their name.

Another way to check the customer service of a company is to find a claims telephone number on their website and call it up. If their claims people are nice to you, the likelihood of the customer service being a positive team has just raised. After you have assessed the courtesy level of the auto insurance company's service department, then politely thank them for their time and hang up. No explanation necessary, they will just move on to their next call without giving you another thought. This technique is based on the theory that there are two kinds of companies: the ones who stock their sales teams with friendly people and put all the low-paid mean folks in their claims departments and the ones who stock both with friendly, professionals. Usually, this simple test will tell you the type of company with which you are dealing.

If the quoted auto insurance policy has both the assets you desire and a high quality of customer service, then the quote is a true quote. Remember if you think you might end up actually using the car insurance--which we should all assume we will--then check these two things before running after the apparently low premiums.

Affordable Auto Insurance: What's Everyone Else Paying?

All drivers want affordable auto insurance, but the average price drivers pay for insurance yearly varies greatly from state to state because of factors such as the stability of the economy and the state's population size. Check out the following information to find out how much insured drivers in your state are paying compared to other states.

According to Insurance Information Institute (www.iii.org), the National Association of Insurance Commissioners (NAIC) calculates average auto insurance expenditures per state by assuming that all insured vehicles have liability insurance, but not necessarily comprehensive or collision coverage. The average auto insurance expenditure, therefore, measures the price consumers actually pay for insurance on each vehicle rather than equaling the sum of liability, collision, and comprehensive coverage together. This is because most policyholders do not usually carry all three types of coverage. NAIC data also shows that 77 percent of insured drivers buy comprehensive coverage in addition to liability insurance. And only 72 percent purchase collision coverage.

In a September 2007 NAIC report, New Jersey held the record for the highest average auto insurance expenditure per year at $1,184. Following closely behind were the District of Columbia at $1,182, New York at $1,122, Massachusetts at $1,113 and Louisiana at $1,076. North Dakota is the least expensive state for auto insurance at $554 per year, and Iowa followed closely behind at only $555.

The price insured drivers pay is affected by the type of coverage purchased, as well as other factors. People who live in states where the economy is healthy are much more likely to buy new cars than people who live in an unhealthy economy. Since the coverage drivers select for new cars differs and can be more costly than coverage for an older car, these states often have relatively higher average auto insurance expenditures per year. Urban population, traffic density, and per capita income also significantly impact the price of auto coverage. Highly urban states with high traffic density and higher wages and prices will usually possess the highest auto insurance expenditures per year.

In an NAIC chart comparing average annual auto insurance expenditures by state (http://www.iii.org/media/facts/statsbyissue/auto), Texas drivers in 2005 paid an average of $845. So, the average cost of Texas auto insurance ranked at number 17. Arizona auto insurance cost about $926 per year in 2005, down from $931 in 2004, keeping Arizona ranked number 14 both years among the rest of the states. In California, insured drivers paid an average of $847 in 2004 and $845 in 2005. This ranks California auto insurance as the 18th most expensive coverage in the United States in 2005. In Florida, ranked sixth in 2004 and 2005, insured drivers paid an average of $1,062 in 2004 and $1,063 in 2005. North Carolina is one of the least expensive states for auto insurance coverage, ranking at number 47 in 2004, with an average cost of $597. However, in 2005, the average auto insurance cost increased to $602.

Finding affordable auto insurance is so important to most drivers, but depending where you live, prices will vary. How do auto insurance rates in your state compare with the rest?