Shopping for auto insurance involves more than calling up the first company that comes to mind and buying the coverage they recommend. You can save hundreds or thousands of dollars a year by shopping around, choosing the right amount of coverage for your situation, and asking about discounts.

Auto insurance companies determine rates differently, so gather quotes from several sources before making a decision. An online comparison website can help by doing some of the legwork for you. By typing in some basic information, you can have free instant access to quotes from several companies with minimal effort on your part. Quotes can differ by hundreds of dollars even with the same basic variables, making this stage of the process one of the best ways to save.

Keep good records about quotes and discounts offered from each company to help you make your final decision. It’s important to give each company the same information so that the quotes you receive are comparable.

It’s important to know how much auto insurance coverage you’re required to maintain by law before you purchase a policy. Coverage requirements vary from state to state, but most require some sort of bodily injury liability and property damage liability coverage. You may also need to purchase uninsured/under insured motorist coverage to protect yourself if the other driver does not have coverage.

Collision and comprehensive auto insurance are not usually required, but you may want to purchase one or both types of coverage if you own a new or expensive vehicle. Collision protects your car in the event of an accident and comprehensive coverage pays for damage due to other causes including water damage or theft.

One way to save on your insurance premium is to choose a high deductible. Although you’ll pay lower premiums, you also take the risk of paying more for repairs if you’re in an accident. Lower deductibles protect you from devastating out of pocket expense at the time of an accident, but you’ll pay a little more each month.

Most auto insurance companies offer discounts for having a good driving record, taking a defensive driving course, or purchasing multiple policies from the same company. Ask each company you’re considering what discounts they offer and factor the savings into your overall premium rates in order to find the company that can give you the best deal.

Getting a good price on auto insurance isn’t the only important factor to consider. You also want a company that will give you great customer service. Look for established companies with a good reputation and take the time to speak with a customer service representative to find out how you might be treated as a client.

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