Consumers today have more tools available than ever to help them shop, compare, and ultimately purchase automobile insurance. Drivers can now research and buy auto insurance coverage through an insurance professional, over the phone, by mail, and on the Internet.

Before you begin shopping, however, you need to investigate the basis for the cost of auto insurance. It can include your driving record, how much you use your car, where your car is parked, your age and gender, the type of car you own, and your credit history. The price can also depend on what kind of coverage is required in your state and how much you need.

Therefore, it’s important to understand these key primary coverages:

  • Bodily injury liability applies to injuries that you as the driver may cause to someone else. The amount of liability coverage you carry should be high enough to protect your assets in the event of an accident. Most experts recommend a limit of at least $100,000/$300,000 .
  • Medical payments or personal injury protection pays for the treatment of injuries to the driver and passengers of the policyholder’s vehicle.
  • Property damage liability pays for damage you or someone driving the vehicle with your permission may cause to someone else’s property.
  • Collision pays for damage to your vehicle resulting from a collision with another vehicle or object or from flipping over. It also usually covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher the deductible, the lower the premium. It is typically an optional coverage.
  • Comprehensive reimburses you for loss due to theft or damage caused by something other than a collision with another vehicle or object. This is also usually an optional coverage.
  • Uninsured and underinsured motorist coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Underinsured motorist coverage usually comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage can also protect you if you are hit as a pedestrian.

Choose the best car insurance for your needs

Now that you know the basics of the different types of coverage available, you can compare several factors to make the choice that’s right for you. Here are some important considerations that can help to make your vehicle insurance shopping experience more productive.

  1. Choose an insurance company that is licensed in your state. To find out which companies are licensed in your state, contact your state insurance department . Drivers must buy their coverage from an insurer that is authorized to do business in their state.
  2. Select a company that is financially sound. Check with independent rating agencies and make sure that the company has an A or better rating.
  3. Check to see if the insurance company provides good service. Your state insurance department can tell you if there are any complaints filed against the company.
  4. Make sure to compare apples to apples. Whether you’re looking at coverage on the Internet or with an agent, make sure you compare the same information from companies you’re researching. Failure to include certain parameters in your comparison could make a difference in price.
  5. Be comfortable with the insurance agent representing you. You have hundreds, if not thousands, of insurance representatives from which you can choose. If you’re not comfortable with the agent you have, move on!

If you’ve been thinking that it’s time to start shopping around for car insurance, you now have more opportunities than ever to compare each insurance company’s offerings. This way you can more easily choose the best option for your needs while also ensuring the most cost effective policy.

Loretta L. Worters is vice president of the Insurance Information Institute, whose mission is to improve public understanding of insurance – what it does and how it works. Ms. Worters is an author and woman’s advocate who appears regularly on TV, radio and in publications. Follow her on twitter at @LWorters.