Eight steps to getting the right insurance policy at the right price

Searching for insurance policies can range from unexciting to overwhelming. With so many insurance companies with varying plans and premium costs, it can be difficult to determine the best deal. However, by following these eight steps, you can simplify the process and find the right insurance policy for you.

1.Evaluate your current insurance policies

Newly built show homes wait for buyers at a housing development in San Marcos, Calif., in this 2012 file photo. The amount of auto and other insurance you need depends in part on the home you own and other assets. (Mike Blake/Reuters/File)

Many people buy their first auto insurance policy, and then continue to pay premiums on that coverage year after year without evaluating whether they are receiving the coverage they need at the most affordable price. The first step to figuring out what insurance is best is to determine what your current coverage is, the amount you pay for that coverage, and the factors contributing to your insurance rates.

For auto insurance, factors such as driving record, occupation, and the type of car you drive can all determine the rate you receive from an insurance company. In addition, the amount of coverage you feel you need depends on certain life factors – things like whether you frequently drive in risky conditions, have an old car or a new car, or have assets that a lawyer may try to sue for in the event of an accident resulting in physical harm.

For example: If you rent an apartment and your biggest asset is $30,000 tucked away in a retirement plan, you probably don't need more than $50,000 in coverage for accidental death and personal injury. If you own an expensive house and have a certain amount in stocks and bonds, you will need that amount or more in coverage.

When choosing other types of insurance, complete a similar evaluation. If you are single you may not need a life insurance policy; if you are married with kids, sit down and determine all of the expenses your family would need to cover if you were gone.

Gather and compare information

The US Bank Tower and the AON Corp. building are pictured as part of the Los Angeles skyline in this 2012 file photo. AON is a global provider of risk management and insurance products. (Fred Prouser/Reuters/File)

Quotes given by insurance companies can vary widely, so devote a good amount of time to researching companies and getting comparison quotes. Be sure each quote is for same amount of coverage you determined you needed in step one, so you are comparing apples to apples. Online comparison sites, insurance company sites, and insurance agents can all help in this process.

Here are some online comparison sites to get you started: Netquote.com, Insurance.com, progressive.com, insweb.com, and autoinsurancecenter.com

Look for discounts

A vehicle stops automatically during a demonstration of Toyota Motor Corp.'s intelligent clearance sonar, which helps drivers avoid a rear-end collision, at its Higashi-Fuji Technical Center in Susono, southwest of Tokyo, in this November file photo. Insurance companies often offer discounts for car safety features. (Koji Sasahara/AP/File)

Insurance companies frequently offer discounts for certain life choices, good health, or good driving history. Less obvious discount possibilities can include installing car safety features, certain occupations, high grade-point averages for students, and bundling options with other insurance plans. If you have a poor driving record that is about to be removed, wait to apply for new insurance until your record is clean. For a break on life insurance, apply when you are younger, quit smoking if you smoke, and exercise regularly.

Call the top contenders

The MetLife building is seen in New York in this 2010 file photo. Once you've narrowed down your choices, call the top companie offering the insurance you want and rank them by price. (Shannon Stapleton/Reuters/File)

Once you have narrowed down your options, call the company’s representative to get a direct quote and answers to more specific questions you may have (a good one: "Do I qualify for any additional discounts?"). Be sure to ask the representative to e-mail you the quote they give, so you have a confirmation of the amount in writing.

Follow the same procedure for each of your picks, then rank them according to price.

Evaluate the insurance company’s financials

An insurance adjustor speaks with a resident while inspecting a boat that became lodged on shore by the storm surge of hurricane Sandy in Staten Island, N.Y., in November 2012. Before choosing an insurance company, you want to make sure that it can your claims. (Lucas Jackson/Reuters/File)

While it is important to make sure you can afford an insurance plan, it is equally important to make sure an insurance company will be able to pay you if need be. Check potential insurance companies' credit ratings and whether any recently had to pay out large sums of money. You can find the ratings online at websites like insure.com. To learn about recent payouts that an insurance company has made, a quick Google search should be able to pull up any recent news of a potential provider. Or you can call and ask customer service.

In addition to financial stability, look into the insurance company’s customer service ratings. You can do this by reading consumer ratings, inquiring through an independent insurance broker, and talking with family and friends. Start by looking at evaluations from sites like J.D. Power and Associates and comparison articles from leading business publications, like Forbes.com.

Be alert for suspicious activity

In this November 2012 photo, John Doak, Oklahoma's insurance commissioner, points out a Chevrolet Tahoe his department recently purchased as part of an expanded focus on criminal insurance fraud. If an insurance company offers you something that seems illegal, report it. (Sue Ogrocki/AP/File)

Do not purchase a plan from a company that makes you uneasy or does anything suspicious. If an insurance agent offers you a deal that seems strange, immediately report the agent to federal agencies including the FBI  (at fbi.gov) and look elsewhere for coverage. Also, be aware of scams. Scammers may try to steal your information by asking for more than is necessary to give you an insurance quote. Never give away your Social Security number or financial information over the phone or Internet.

Review the policy

A 2013 Honda Accord undergoes a small overlap frontal crash test. Pay special attention to rates, accident forgiveness, safe driving bonuses, rewards, and replacements when reviewing your auto insurance. (Insurance Institute for Highway Safety/PRNewsFoto)

Before signing a policy, read it closely to be sure the terms match the premium and coverage you were looking for. Watch out for any language that will give the insurance company more flexibility than you would like in covering a claim.

For an auto policy, pay special attention to the rates, accident forgiveness, safe driving bonuses, rewards, and replacements. For life insurance, make sure you understand the level of coverage you need, the different kinds of insurance policies, the premium payments, renewal policies, and how many people are covered.

Cancel the old policy

Newlyweds Nicole Angelillo and Gerald Sapienza, both of Chesapeake, Va., are seen at the very top of the Farmers Insurance “The Love Float,” in the 124th Rose Parade in Pasadena, Calif., Tuesday, Jan. 1, 2013. The couple was married aboard the float just minutes earlier by nationally syndicated radio personality Sean Valentine, center. (Reed Saxon/AP)

But wait. Don't cancel your old policy until the new policy has been finalized. It's better to have a day or two of overlap, rather than going a day without being insured. In fact, many states require that you secure a new insurance carrier before leaving the old one. Furthermore, it is illegal to drive without auto insurance coverage, so if you are switching, make sure there is some overlap time. 

– Richard Quadrino is the co-founder of QuadrinoSchwartz.com, an insurance litigation firm with offices in New York City and Garden City, N.Y.