Auto Insurance Buyer’s Guide

Auto insurance can be a confusing and expensive! This guide will help explain the coverages and give some tips on how to get the best value when purchasing car and truck insurance.

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Let’s get started! Here are the top ten tips and considerations when buying auto insurance:

1. Understand what’s at stake

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If you’re involved in an accident that is your fault (an at-fault-accident or AFA in insurance-speak), you owe for the damage you did to others in that accident and you may want to have insurance to repair your car too. How expensive can this get? . . .

Let’s start with what you owe in the case of an accident that’s your fault. We’ll break it down into two categories:

  1. Property Damage: This one is straight forward; you owe for the stuff you damaged. Most of the time this is car you hit, but it could include multiple vehicles, utility poles (expensive), retaining walls, fire hydrants, personal possessions, and cargo. We’ll get into that a bit further on . . . for now, just know that property damage can really add up.
  2. Bodily Injury: This is the expense that arises as the result of injury in an accident. Imagine you miss a stop sign and send a parent and their child to the hospital. Both require multiple surgeries and the parent misses months of work. You’ll likely owe all the medical expenses and lost wages. Read on for more details about how insurance can help.

As for the damage to your car or truck, that can be covered under your policy and we’ll cover that in a moment. 

2. Understand what drives your auto insurance cost

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Auto insurance rates are complex and hard to figure out, sometimes there are thousands of possible rate combinations for just one company! But there are some things that almost always effect your rates. Here are a few of those things:

  • Driving Record: Tickets and accidents increase rates. Even a single ticket can cost you lucrative “clean driver” discounts. The more negative driving activity, the more your insurance will cost.
  • Claims: Generally speaking, claims (even if there was no accident) tend to lead to increased rates as well. However there is an exception in Massachusetts where glass claims do not impact the rate.
  • What you drive: A boring cheap sedan is usually less expensive to insure than an expensive fast sportscar or fancy truck. The likelihood of accidents, overall value, and the average cost of repair all factor into the cost to insure a car.
  • Your coverage: The more coverage you have on your policy, the higher the cost. And some coverages are more expensive than others. But take this as a warning . . . companies charge more for certain types of coverages because those types have more frequent or expensive claims.
  • How you’re using the vehicle: Business use (e.g. real estate professionals, contractors, or corporate field salespeople) will cost a little more than regular commuting. Pleasure use has the lowest cost of all.
  • Where you garage the car or truck: The zip code you store your vehicle at can make a significant difference in your rates.
  • How many miles you drive: How many miles a year you drive can make a significant difference in your cost. More driving equals more risk.
  • Driving experience: The more licensed experience a driver has, the lower their rates tend to be. Most companies level off pricing at about 10 years of licensed experience, but a few level off in as little as 3 years.
  • Deductibles: The higher your deductibles, the lower your premium. Just be careful, it also means you’ll owe more out-of-pocket at the time of a claim.
  • Discounts: The more discounts, the lower the policy premium. The biggest discounts are usually clean driver, paid-in-full, and multi-policy discounts. That said, just because a company offers a ton of discounts doesn’t mean it’s a good deal.You really need to look at the final policy cost and compare that to offers from other insurance companies. Common discounts include:
    • Telematics: Many of the larger insurance companies now offer a variable discount based on your safe driving behavior. Progressive’s Snapshot is probably the most famous of these discounts. The idea is simple, you install a little device in your car or app on your phone and drive normally for 3 – 6 months (depending on the company). During that period the company will monitor your driving for fast acceleration, hard braking, high speeds, etc. . . . basically, how safely you drive. At the end of the evaluation period you’ll get a final discount that can be as high as 25%!
    • Account: Multiple policies with the same company typically provides a discount. Home/Auto discounts are often 20%+ and not to be over looked.
    • Advanced Quote: If you’re getting a quote before you need the insurance you’ll get a nice discount. Usually shopping at least a week in advance will give you the biggest discount.
    • Good Student & Drivers Ed
    • Muli-Car
    • Full Coverage
    • Clean driver
    • Renewal
    • New Business
    • And many more

Don’t get hung-up on discounts, instead pay attention to the final price and how much coverage you’re getting for it.

3. Consider putting your auto & home insurance with the same company

Silver-gray car in front of home in woodland setting

Wanting to focus on the task at hand is understandable, so it may be tempting to just insure the cars now. But that may not be a good idea; looking at the whole package may prevent coverage gaps and save costs. A good agent will usually ask to review your whole account for two reasons:

  1. To ensure all your insurance fits well together and . . .
  2. To make sure you’re getting the biggest discounts and credits (e.g. multi-policy or account credits)

However, there are times when splitting an account across insurance companies makes sense. This is where a good independent agent is important to minimize gaps in your coverage.

Common reasons for placing your car and truck insurance and homeowners insurance with different companies are:

  • Cost savings: Company A has an awesome rate on the car insurance but a terrible rate on the home insurance, and Company B has the reverse situation.
  • Acceptability: There are times when a home must be placed with a company that doesn’t offer auto insurance. This is common with coastal properties or properties/owners with a history of claims.
  • Coverage: Sometimes it’s in your best interest to split companies when specific coverages are needed. A home business, farm exposure, or historic homes are all good examples of this.

4. Use an Independent Agent

There are three main ways to buy auto insurance:

  1. Independent Agent: Independent agents can access many companies to find the right coverage, fit, and value for your unique home and family. This means you get a licensed agent to work with and options. Using an Independent Agent also means when it benefits you to change insurance companies down the road, you can keep working with the same agent who already has your information and knows your story.
  2. Captive or Direct Agent: These types of agents can only sell a single brand of insurance. Here you get an agent to work with but only one insurance company option.
  3. Online: Since you’re the one reviewing the company and picking the coverage, you’re expected to be the coverage expert. With this option, if anything goes wrong, it’s you vs. the company with no dedicated agent to help you.
Greg Safford | Why I Love Insurance | Franklin MA | Safford Insurance

Am I biased towards the Independent Agent option? You bet I am! I’m a believer in the Independent Agent system not because I am one; rather I became one because I believe the Independent Agent system is best for the customer. After all, would you use a Realtor® who can only show and sell you one house? Purchasing options and professional advice are both very good things when it comes to protecting your property and investment.

5. Understand the coverage and deductibles

Toy car upside down on road

Coverage is the reason for buying insurance. You may not need every coverage but here are few of the core coverages you’ll want to consider when protecting yourself and your vehicle:

  • Bodily Injury Liability: Pays for the costs arising out of injuring someone in an accident that is your fault.
  • Property Damage to Others: Pays for damage you do to property in an accident that’s your fault. This can include the car you hit, utility poles, buildings, etc. It also includes damage to the contents of the vehicle you hit . . . imagine hitting an Amazon van and damaging the packages.
  • Un/Uninsured Motorist: Protects you from other drivers not carrying enough, or any, insurance. If another driver is at-fault and you’re injured, this coverage steps in to cover your bodily injury when the other driver’s liability coverage runs out.
  • Medical Payments: Pays the medical expenses of those injured in your car during an accident. This is different than liability coverage because it doesn’t require the passenger make a claim of fault for the coverage to apply. 
  • Collision: If your car is damaged in an accident, collision coverage is what covers the repairs. Collision coverage is usually subject to a deductible, which is the portion of the claim you’re responsible for paying. E.g. if repairs cost $5,000 and you have a $500 deductible, the insurance company will pay out $4,500 for the claim.
  • Comprehensive (Other Than Collision): Provides coverage for fire, theft, flood, vandalism, striking a living animal, weather related damage, glass damage, and more. Like collision coverage, comprehensive is subject to a deductible. However, for an extra couple of bucks you can usually purchase a waiver of the deductible for glass claims.
  • Loss of Use (Rental Car): Provides funds for a rental car while yours is in the shop being repaired after a covered loss.
  • Roadside Assistance: Most insurance companies offer a sign-and-drive roadside assistance program (similar to AAA but usually not quite as robust). Be careful though, some companies only offer small towing cost reimbursements and no actual roadside assistance.
  • Accident Forgiveness: Some companies offer or include accident forgiveness with their policies. If you have a clean driving record for a certain amount of time (usually 3 – 6 years) and then have an at-fault-accident, the company won’t increase your renewal as a result of that accident. Note that some companies make the clean driving record requirement a policy level requirement (meaning all drivers need to maintain that clear record).
  • GAP: If your car or truck is a total loss (meaning the cost of repair is more than the value of vehicle), you may end up owing more on the loan that the car is worth. GAP coverage pays the difference between the settlement amount and the loan balance. In other words, if you’re upside-down on your loan when your car is totaled, GAP coverage may pay off the balance.
  • New Car Replacement: If your newer model car is a total loss, the company will pay to replace it with a brand-new car. Most of the time New Car Replacement extends to cars one or two model years old.
  • Waiver of Depreciation and Betterment: Insurance companies are allowed to depreciate parts on your car at the time of a claim. For example, if your tires are half-way through thier usable tread when destroyed in a covered claim, the insurance company can pay 50% of the cost of a new tire. Waiver of Depreciation and Betterment coverage prevents that practice.

6. Don’t skimp on coverage

Caution! Get the right insurance

A car accident is likley one of your biggest financial exposures. If you’re at fault and it’s a bad accident, you can be on the hook for huge medical bills, lost wages, and more. If you don’t have enough insurance to cover the settlement, you could lose your savings and even have your wages garnished.

If the tables are turned, and someone hits you . . . you could be left holding the bag if they don’t have adequate insurance to cover your injuries and lost wages.

Increasing your liability, underinsured motorist, and uninsured motorist coverage usually costs only a few extra bucks a month and can help protect you from the scenarios above.

Remember, car and truck insurance is more than just coverage for vehicle. It also provides liability coverage that helps protect your assets and income from lawsuits arising from accidental injury to another person.

7. Massachusetts auto insurance is different

National Old proposed highways map of the state of Massachusetts

Massachusetts is a unique state in how it handles auto insurance. Here’s a quick overview to make sense of it:

  • Your insurance is tied to your registration: In MA, your insurance is tied to your vehicle registration. If your insurance lapses, the insurance company will notify the RMV and eventually your vehicle registration will be suspended.
  • You need an insurance “stamp” before you can register a vehicle: Before the RMV will allow you (or a dealership for you) to register a car, you need to have a Registration & Title Application (RTA) form with a valid insurance stamp on it. That means your agent needs to add the car to your policy and “stamp” the RTA form before you can get it registered. And you will be required to take a physical copy of that stamped RTA form to the RMV for processing (unless a dealership is handling it for you).
Pro-tip: A good insurance agent can stamp almost any Registration & Title Application (RTA) form electronically via email.
    • Mandated Coverage: Every single personal auto policy in the state of Massachusetts has a core “mandated” policy. With it comes the state minimum coverage limits of:

      – Bodily Injury to Others: $20,000 per person; $40,000 per accident
      – Property Damage to Others: $5,000 per accident
      – Personal Injury Protection (PIP): $8,000 per person, per accident
      – Bodily Injury Caused by an Uninsured Auto: $20,000 per person; $40,000 per accident

      Those limits are scary low and that base policy has coverage gaps big enough to drive a truck through. This is why nearly every auto insurance company adds to these minimum coverages (with optional limits you select) and fills in a lot of the coverage gaps (e.g. extending coverage beyond the state borders of Mass).


  • Household drivers are handled differently here: This is where having a good agent pays off . . . in most states you have two options for each driver in the household, rate them (covered) or exclude them. But in Massachusetts we often have three different ways to list each driver in your household on your car or truck insurance policy: 1. Primary or Regular Operator: This means your insurance is primary for that driver. This is the most common operator type.

    2. Occasional or Differed Operator: This means the listed driver has their own separate insurance policy. Differed operators are covered under your policy and most companies do not charge for them because they already have their own insurance. However, differed operators are not reported to the RMV because they have other primary insurance. Also note, not every company allows differed operators! Some require drivers be either listed as regular operators or completely excluded from the policy.

    3. Excluded Operator: This is when you exclude a household driver from the policy entirely. This can be handy in certain circumstances but leaves you with no coverage if that excluded operator is driving your car. To make sure you’re getting the best value and not creating gaps in coverage, tell your agent about everyone in your household that drives, including room mates etc. Your agent needs to know this to help minimize problems at the time of a claim. Plus, your agent may be able to find you a solution that saves your money and better protects all those in your household.

8. Picking the right insurance company for you

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There are pros & cons to each insurance company. Here are a few things to consider when choosing . . .

If you travel a lot, you may want to chose a large national insurance carrier like Safeco or Progressive. They come with the peace of mind that accompanies broad coast-to-coast claims networks.

Is a really good mobile app and 24/7 access to billing and policy information important to you? Check and make sure the insurance company you’re looking at has these options.

Big claims networks and robust technology packages tend to be the domain of giant companies. The trade off to choosing a huge company is that you’re more likely to be treated like a number. If you want more personal touch, a small regional insurance carrier may be a better fit.

Your independent agent can help you find not just the right coverage and pricing for you, but also the right company fit.

9. Should you get a commercial auto policy instead?

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Business use can often be covered under a personal auto policy. Real estate agents, artisan contractors, sales people, etc., are acceptable to most companies. But sometimes a personal auto policy isn’t the right option.

Here are some examples where a commercial auto policy is a better fit:

  1. You need really high limits of coverage: Business auto policies often offer higher limits than personal auto policies.
  2. Your vehicle is commercial in nature: If you have a dump truck, flatbed, panel van, mini-bus etc., you’ll need a commercial auto policy. Note: you may be required to have a commercial auto policy even if you’re using that commercial type vehicle for personal use.
  3. You do any sort of time sensitive delivery: Pizza delivery, courier work, etc. almost always quire a commercial auto policy.
  4. You do jobs that require a Certificate of Insurance (COI)

Don’t worry if you need a commercial auto policy, your independent agent can help determine which policy is right for you.

10. Protect yourself with more than auto insurance

Sometimes, the greatest threat to your assets and income isn’t specifically auto accident related. Insurance can play a part in helping protect your income and assets from loss, meaning you’ll be better able to pay the bills and keep your savings.

  • Life/Disability: Auto accidents can have awful consequences. What would happen if you lost the income of a household member? Life insurance is usually surprisingly affordable; and disability income insurance can be immensely helpful in protecting your income should you become one of the millions of disabled Americans.
  • Additional Liability or Umbrella: Sometimes lawsuit demands can exceed your home or auto insurance limits; in those cases you’ll want a little more protection. Umbrella policies are a great low-cost way to provide additional coverage that sits on top of your homeowners insurance, auto insurance, and most other insurance personal insurance. An umbrella may even fill in some gaps in coverage.
  • Homeowners and Renters Insurance: This important coverage protects both your property and your personal liability. If you want to learn more, check out our Guide to Homeowners Insurance.
  • Specialty Insurance for Your Motorized Toys: Motorcycles, boats, ATVs, RVs, and more . . . they come with their own exposures and dangers. Don’t forget to tell your agent about these vehicles!

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