When you talk to people at work and compare the price you are all paying for auto insurance, you might be surprised at what you hear. Someone who is the same age as you, driving a very similar vehicle might be paying a whole lot less than you, but that is not always because of the insurance company they have chosen. Plenty of times it has more to do with the type of coverage that they have.  So, when you go shopping for auto insurance, it is important to be able to understand the auto insurance quotes that you are given.

The first place where a huge difference in your auto insurance quotes can be found is in the amount of coverage. There are several different categories of coverage – collision, comprehensive, uninsured – and knowing how much coverage you have in each category is vitally important. Of course, you want to have at least your state’s minimum coverage (and a whole lot more), but knowing what you have and how to compare it to another policy is important.

Your auto insurance quotes will also vary greatly depending on your deductible levels. In short, the higher your deductible, the lower your insurance premium. While having a high deductible may seem like a good idea in the short term, if something happens to your car, you may find that the damage is actually less than the deductible, in which case, the insurance company will cover none of the costs. So, make sure that you have the lowest deductible that you can afford to make sure you will always be covered if something happens.

Finally, state minimum coverage is mandatory coverage, but in almost all cases it is not enough to protect you from liability, so get as much coverage as you can afford by shopping online for an affordable policy.

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Photo Credit: Kevin Hutchinson