How Do You Shop for Auto Insurance?

Virginia has a competitive rating law. This means that different companies will be charging different prices for auto insurance. Choosing your insurance company is like choosing your favorite brands of other products. Price is important, but it should not be the only thing you think about. Before buying your insurance, you should consider contacting a number of insurance agents or companies to find the best combination of quality and price for your needs.

If you decide to shop for auto insurance, the first step is to get to know the product you are buying. Read the earlier sections of this Guide, especially, "How Much Insurance Do You Need?" If you know what you want before you shop, you are less likely to buy what you do not need. Then, call several insurance agents. Ask each one to give you a quotation of how much the annual premium for a policy insuring your auto would cost.

Most companies sell policies that are renewable every six months. Consider buying a one-year policy if it is available so that there will be more time between premium increases. And be sure you ask if the prices you are quoted are for six months or one year. Tell each one how much insurance you want and describe yourself and your auto. Many companies have premium payment plans available.
However, a separate service charge may be added to each installment. Premiums can also be financed through premium finance companies. A separate service charge and interest will be applied when financing your premium through a premium finance company. Any additional charges should be considered when comparing premiums. Use the Automobile Insurance Quotation Worksheet at the back of this guide to keep track of the information you will need to give them and the prices they give you.

The Bureau of Insurance publishes a consumer guide designed especially for comparing sample auto insurance premiums in Virginia. Contact the Bureau for a copy of this guide (877/310-6560).

Once you have narrowed your search to two or three companies with the best range of prices, you should consider each company's reputation for financial stability, policyholder service, underwriting practices, and claims handling practices. Service is difficult to measure. However, you can get some indication of a company's quality by talking to different insurance agents. You may also ask
your friends and neighbors who are policyholders of the companies that you are considering about experiences with their companies.