When you're looking for car insurance, you can face a list of coverage terms you're unclear about and pricing methods that can be confusing. Auto insurance agents know what customers usually don't understand, so we asked them to pinpoint consumers' biggest knowledge gaps and misunderstandings.
EverQuote surveyed almost 500 auto insurance agents nationwide. Here's the inside scoop from agents.
What to know when you start shopping for car insurance
The start of a good insurance-shopping plan is to understand the coverage types available and what affects the price. Those are also the two biggest confusions among customers, say agents we surveyed.
The two common types of auto insurance that are most confusing are liability (42% of agents say it's least understood) and uninsured motorist coverage (37% say it's least understood).
- Liability insurance covers damage and injuries you cause to others. It's typically required by state law, and you'll be glad you have it if someone sues you over a car accident. But it doesn't cover your own car. To cover various causes of damage to your own car you'll need collision and comprehensive insurance.
- Uninsured motorist insurance typically refers to coverage for injuries to you and your passengers if you're hit by someone with little or no liability insurance. Some states require it.
Here's more on how much car insurance costs and what affects price.
The problem with insurance claims
Misunderstandings about coverage can come back to bite if you're in a car accident or have a claim. Not understanding what you've bought -- or what you skipped -- can mean surprise bills after an accident. Many car insurance agents say they most wish consumers knew what coverage applies to claims.
Agents we surveyed also commented that they want consumers to be aware that they typically don't handle claims. Insurance adjusters do that.
In addition, most insurance agents surveyed (55%) say people don't know what issues often lead to rate increases, such as accidents and claims.
Do people know what issues (accidents, claims) will likely result in an increase at renewal time? Auto insurance agents say:
|No, most don't||55%|
|Yes, most do||42%|
Surprise! Credit affects car insurance rates
The topic car insurance agents agree about the most: People don't realize that credit is generally a factor in rates. The practice of using credit in auto insurance pricing is banned only in California, Hawaii and Massachusetts. In other states, auto insurers routinely use "credit-based insurance scores" as a factor in rates. Insurers say there's a correlation between credit and the chance you'll make insurance claims.
In addition, half of agents (50%) say consumers aren't aware that insurers typically look up past claims when you apply for a policy. Past claims are also typically a factor in rates.
Do car insurance buyers know that insurers typically look up their past property claims? Half of agents say no.
|No, most don't||50%|
|Yes, most do||43%|
What to know if you have a teen driver
Most agents (60%) say customers aren't aware how much adding a teen driver will cost. Many also commented that parents should consider increasing insurance limits when they have a teen driver. Because teens are higher risk and more likely to have accidents, minimal auto insurance isn't a good choice.
Among people with teen drivers, what do you wish they knew more about? Most agents say cost.
|How much adding the teen will cost||60%|
|When they should add the teen to the policy||31%|
|None of the above||2%|
|I have not had clients with teen drivers||1%|
Auto insurance agents we surveyed advise parents to ask about potential discounts that can apply to the teen driver. And they warned not to try to hide the teen from the insurer -- get them properly listed on the policy.
There's more to car insurance shopping than price, say agents
The overwhelming majority of car insurance agents we surveyed (94%) say price is the No. 1 influence when people shop for auto insurance. Other influences all came in under 2%, including commercials, brand names, and customer satisfaction ratings and reviews.
Many agents also commented that there's more to smart shopping than price. It's essential to understand what you're buying. Consumers sometimes reduce coverage in order to get a lower price without understanding the trade-offs. If you're in an accident you could be on the hook for thousands of dollars that insurance won't cover.
And a low price doesn't provide value if the company has poor customer service or claims handling.
EverQuote surveyed 494 auto insurance agents nationwide in March 2018 who use the EverQuote platform. Agents received no compensation for taking the survey.