Believe it or not, when it comes to shopping for auto insurance, the premium amount isn't the only thing that should shape your purchasing decision. Unfortunately, many consumers aren't aware that there are other factors to consider when buying car insurance--and end up regretting their decision.

So before you sign on the dotted line, consider the following factors and make a smarter decision about your car insurance purchase!

Proper Licensure

Unfortunately for consumers, there are dishonest agents and insurers in the marketplace that aren't licensed to sell insurance. As you compare policies and insurance companies, remember to verify whether your agent and the company he or she represents are licensed to sell insurance in your state.

Go beyond verbally asking your prospective agent and check your insurer's credentials through the Department of Insurance (DOI) in your state. In addition to information about insurance, the DOI also keeps track of insurers licensed to sell insurance in your state.

If the DOI doesn't have record that your prospective agent is licensed to sell insurance, don't buy a policy from that company or agent--doing so will only open yourself (and your wallet) up to becoming a victim of insurance fraud.

Financial Strength

If you've never thought about checking the financial solidity of your prospective insurers, you're not alone. It is one of the single most overlooked factors by consumers shopping for car insurance.

The reality is that the cheapest car insurance in the world won't do you any good if the insurer goes bankrupt or doesn't have enough money to pay out your claim. Save yourself the heartache of doing business with a financially unstable insurer and check the financial standings of every insurer you're thinking about buying a policy from.

Independent rating agencies like AM Best are great resources for investigating would-be insurers--and can usually be accessed for free.

Customer Service

Your insurance company, its agents, claims adjusters and all other representatives should answer your questions and file claims in a friendly and efficient manner. You can avoid the frustration of doing business with an insurance lacking in customer service by doing a little research before signing a policy with them.

You can usually get a good idea of the insurer's customer service skills through casual interaction with them. You can also ask your prospective agent if there's a customer service department or claims representative, which will typically make it easier for you to contact someone if you need to file a claim. Some consumers even call the insurance agency to see how long they're put on hold before being connected with someone who can help them. And, of course rating agencies like AM Best typically disclose customer service ratings for inquiring consumers.

Your Gut

During the auto insurance shopping process, pay attention to gut feelings and reactions. If you see a red flag during your interaction with potential insurers, don't ignore it. You're better off taking your business to an agency and agent that you feel comfortable with.

Applying Lessons Learned

While nobody likes to spend a lot of money on auto insurance, you can make the most of your premium dollars by taking the abovementioned factors into account. So, while you're on your quest for cheap car insurance, remember these tips to make a sound purchasing decision!

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About the author:

Megan L. Mahan is a copywriter and insurance expert based in Denver, Colorado. She holds degrees in French and English from the University of Iowa and lends her writing and editing expertise in print media and Internet communications through her informative articles.