How to Shop for Insurance
Decide on the coverage you need and want before you shop
Although
you must insure your vehicle to the minimum standards previously described, you
do have some options. Before you begin shopping, decide on the policy limits
you need for each kind of coverage and the deductibles you can afford. For example,
if your deductible is $500 for collision coverage and you have an accident, you
must pay the first $500 before your insurance company will pay for the
remainder of the loss.
Decide on the coverage you need and want before you shop
You
may wish to purchase additional coverage rather than the minimum prescribed.
Deciding on the type and amount of additional coverage you want before you talk
to an agent or company will allow you to compare “apples to apples.” Discounts
can differ from company to company in type and amount. Make your com parison on
how these discounts affect the final cost. Using the cost comparison sheet
(page 17) will help you comparison shop.
Call
several agents
There
are two types of agents: those that represent a single company (captive agents)
and those that represent a number of companies (independent agents). Each will
be able to provide you with a quote for insurance coverage. Make sure you know
which company the agent is obtaining the quote from. If you have questions
about a company or agent, please call the Department of Commerce Consumer
Response Team (CRT) at 651-296-2488 or 800-657-3602.
Ask
about surcharges
As
noted above, an insurance company may affix a surcharge to your policy if you
make a claim or receive a ticket for a traffic violation. Ask about the company’s
surcharge policy, under what conditions it is applied, and how the amount is
determined.
When
comparing rates of insurance companies, the seemingly lowest rates may not be,
once the surcharge is factored in. Some insurers don’t have surcharge plans;
some forgive first accidents, tickets, and similar violations; and most
companies will vary in the amount of their surcharge.
Every company is required to provide the policyholder with a surcharge
disclosure statement, prior to accepting the initial premium payment. Once a
policy is in effect, an insurance company cannot change a surcharge plan without
first mailing or delivering a copy of the new Surcharge Disclosure Sheet to the
insured.