This is a guest post from Miranda Marquit. She writes on a variety of personal finance topics and edits information for DestroyDebt.com and for YieldingWealth.com.

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One of those necessary costs — if you own a car — is auto insurance. While state requirements for coverage vary, just about all of them require you to have some kind of coverage. And, depending on the type of coverage you get, the premium you pay for auto insurance varies. In order to make sure that you get the best coverage for you, at the best price, you need to shop around for your auto insurance.

Figure out what you need in terms of auto insurance coverage

The first thing you need to do is figure out how much coverage you need. You can get a basic idea by looking at the minimums required by your state. If you are still making payments on your car, you should also find out from your lender what coverage they require. Most lenders require that you carry collision insurance, which will cover damage to your car, no matter whose fault it is.

Also, understand what the limits are on your current coverage (and decide if they are what you would like them to be). Usually, you will coverage expressed something like this: 100/300/50. This is for liability coverage — the amount of the damage to person and property the insurance company will cover when you are responsible for an accident. Here is what those numbers mean:

100: The maximum the insurance company will pay for each person in terms of injury is $100,000.
300: This number ($300,000) is the number total per incident that the company will pay.
50: The last number (in this case representing $50,000) applies to property damage per incident.

It is possible to have these limits raised, although it will result in higher premiums.

Also, if you are worried about theft, “acts of God”, and other non-crash related damage to your car, you can get comprehensive coverage. You should not that the more coverage you get, the higher your premiums.

Other types of coverage usually available on auto insurance policies include:

• Medical: This covers injury to those in your car. Liability won’t cover you or your family members (but it will cover non-family members injured in your car), so if you are worried about your health insurance ^[2] covering this cost, you can add medical.
• Uninsured/underinsured: This is helps you pick up the slack if the responsible party doesn’t have coverage — or adequate coverage for the costs. You could sue, but if the other person doesn’t have any assets, getting recompense is difficult.
• Umbrella: This can be helpful in terms of a combination with homeowner’s liability. However, umbrella coverage is usually expensive.
• Optional coverage: Check to see coverage for windshield repair and replacement, towing help and car rental.

Call for a variety of auto insurance quotes

After you have decided what kind of auto insurance coverage you need, call for a variety of quotes. Make sure you give the same information to all of the people you call. It can be a good idea to know your credit score ^[3] ahead of time (you can visit for help with this), since many insurers check your credit. This way you do not have to be subject to a credit check for each quote that you get.

Call some major providers, as well as discount providers. Make sure that you are comparing coverage to coverage. This way you will be able to see that you are getting quotes that are comparable to each other. Get quotes and compare which company offers the best value.

Next, ask your friends ^[4] and relatives about their auto insurance. Do a little research to make sure that customer satisfaction and service are priorities. Sometimes, the auto insurance premium is too cheap to be true. This usually means difficulty getting your claim processed or some other problem. Be sure to verify that the company and/or agent is reputable.

Tips for a lower auto insurance premium

If you are looking for a lower auto insurance premium, here are a couple of tips that can garner you a discount:

• Have a good credit score.Purchase other products.
• Most insurance companies offer a “tri-line” discount if you get homeowner’s/renters and life insurance ^[5] through the same company.
• Check your coverage to see if there is something you don’t need.

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Miranda Marquit edits information on debt consolidation for DestroyDebt.com (subscribe to the Destroy Debt RSS ^[6] feed). She also writes on personal finances for YieldingWealth.com (subscribe to the Yielding Wealth RSS ^[6] feed).

[tags]auto, car, company, coverage, credit, discount, guest post, insurance, liability, premium, quotes[/tags]

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