Consumer Guide to Automobile Insurance
Shopping For Auto Insurance
A. Differences in Rates Among Insurers
There is active competition among auto insurers in New York State. Rates can vary considerably among insurers. The differences in rates are based, among other factors, on the specific experience of the particular group of insureds a company insures.
Therefore, it is always a good idea to obtain quotes from several insurers. Consumers who shop get better value for their insurance dollar than those who do not. Many companies are part of groups that include several affiliated companies under common management. Ask the agent or broker to specify the name of the company that will issue your policy.
When shopping for a new or used car, it is best to check with your insurance professional to verify the cost of insuring the particular vehicle you are considering purchasing.
B. Obtaining Rate Quotes
There are various ways in obtaining rate quotes for auto insurance. You may contact agents, brokers or individual insurance companies directly via phone (See listing of insurance companies' telephone numbers) or on the internet. There are also quoting agents that actively market their services to consumers and provide sample automobile insurance rates of specified insurers via a number of web sites.
When obtaining quotes, you should consider the following:
- If you intend to purchase
auto insurance, make sure the insurer you are dealing with is licensed to sell
insurance in New York State. If you are unsure of the licensing status of an insurer,
check the Directory of Regulated
Companies on the Department's Web site. Just because an insurer has a Web
site doesn't make it a licensed insurer. In addition, you should only be dealing
with licensed agents and brokers. If you are unsure whether an agent is licensed
in New York, call or e-mail the agent and request his or her New York license
- Make sure you answer questions regarding your
driving history, your vehicles, and other relevant characteristics fully and accurately.
For example, if you're unsure whether you had an accident or violation within
the past three years, take the time to check first.
the declarations page of your current policy by your side as you respond and know
the make, model, year and vehicle identification number (VIN) for each of your
- Remember, when you are applying for or purchasing
insurance you are conveying key financial and personal data to an insurer or agent.
Make sure you know who you are speaking with on the phone. If you are on a web
site, make sure it is secure. Many Web sites will include their privacy and security
policy on the site itself. For example, a Web site may be encrypting (coding)
your private information to make it unreadable to third parties. The Web site
will describe that process. In addition, you can activate your Web browser to
notify you when you are entering or leaving a secure mode.
- Generally, a price quote from an insurer on the Internet will be the same as one received by mail, fax, or phone. However, some insurers are now offering discounts for business transacted strictly over the Internet.
Once you have followed the above guidelines and obtained your quotes, you should be ready to make meaningful comparisons among insurers.
Although the Internet currently accounts for a relatively small percentage of total insurance sales, its influence in the marketplace is growing rapidly. Over the next few years, Internet sales are expected to grow as competition intensifies in the electronic marketplace. New York State consumers should be aware that the Web can be a convenient means of comparing prices and/or purchasing automobile insurance, but that it is not necessarily the best means for every consumer. Whether you use the Web or not, it pays to shop for auto insurance.
C. Don't Shop By Price Alone
Price is only one of many factors to consider in selecting an insurance company. Keep a number of the following key considerations in mind:
company claim practices, reliability, and the services provided by agents, brokers
or insurance companies. The Department's Automobile
Insurance Complaint Ranking, also available on the Department's Web site,
is one source to help you assess an insurer's claims-handling practices.
- The particular types of products and coverages offered to meet
your individual needs. For example, do you want comprehensive or collision coverages
or higher liability limits to protect your assets? Many insurers offer various
packages of optional coverages and benefits that may also be of interest.
- Some mutual insurers may pay dividends to policyholders that
are not reflected in the price of the policy.
- Most insurers have merit rating plans (discussed in Chapter VII) charging higher premiums to drivers who are involved in accidents or convicted for certain traffic violations, such as speeding. The low rates of some insurers, after surcharging for an accident, may not be such a good deal.
Many insurers permit the premium to be paid in installments. If you choose this option you should be aware that fees may be charged for this service. In addition, insurers may charge fees for late payment or checks returned for insufficient funds. Such a "bounced check" fee may not be greater than $20. Lastly, the existence of fraudulent insurance claims has an overall impact on premiums. There is a $10 annual Motor Vehicle Law Enforcement fee ($5 for a six-month policy) added to your auto insurance premium for each registered vehicle you insure. The purpose of these fees is to provide additional funds to combat auto theft and fraud in New York State.