5 Things To Consider Before Taking Out Car Insurance

Auto insurance is everyone’s protection down the road. Because of the unpredictable nature of car accidents, having car insurance safeguards you from damage and injury liability. While many owners are concerned with their expensive vehicles getting blemished during these mishaps, shouldn’t you be worrying more about the highest price: putting your own life on the line? 

In the United States, car insurance costs an average of USD$1,130, while the associated costs in a car accident have amounted to USD$7,500 to USD$1,130,000 involving property damage and loss of life. 

Before taking out any auto insurance policy, make sure to come ready for your appointment with the policy provider by considering these things:

1. Ask What Does and Doesn’t Cover The Policy 

Car insurance policies have varying coverage, which will become your corresponding protection in the event of an accident. Being informed of the coverage involved in your policy is one of your many responsibilities as a car owner. 

Generally, most insurance policies should cover the following: 

  • Personal liability
  • Uninsured or underinsured motorist 
  • Personal Injury Protection (PIP) 
  • Medical coverage
  • Comprehensive coverage
  • Collision coverage
  • Car rental
  • Roadside assistance

When looking for a policy, prioritize asking the provider if the policy covers those listed above and which aren’t covered. 

To prove that you’ve met your state’s minimum car insurance coverage requirements, having an SR22 is handy for people with traffic violation records. If you’ve committed major offenses on the road, why not check here to file an SR22 today? 

 

 

2. Take Car Insurance Coverage Laws Into Account

Not all states require owning an insurance policy, but it doesn’t mean you can get away from accident liability. If you don’t have car insurance, you’ll still face some form of financial responsibility from your state. 

If you’re planning to sign up for car insurance, be aware of the car insurance minimum coverage requirements in your location. Also, states may implement different minimum liability limits. 

Regardless of which state an accident occurred, you’ll only have to follow your state policy’s limits, so it’s paramount to meet your state’s required coverage. For instance, Kentucky’s mandatory insurance coverage should cover bodily injury, property damage liability, and PIP, with minimum liability limits of 25/50/10. On the other hand, Alaska only requires bodily injury and property damage liability coverage of 50/100/25 liability limits. 

 

 

3. Take Note of Factors Affecting Your Insurance Premiums 

Insurance premiums refer to your insurance plan’s costs, and they’re not the same for every policyholder. Insurance companies have different formulas for computing an individual’s insurance premiums, but they typically depend on the same factors, including your age, marital status, location, financial standing, and driving history. 

Moreover, many companies utilize credit-based insurance scores as they can highly predict one’s accident potential. According to a Federal Trade Commission (FTC) study, people with higher credit scores are less likely to get involved in a vehicular mishap compared with those with lower credit scores. If you don’t have a good credit score, here’s how to build it fast before taking out car insurance. 

 

 

4. Consider Increasing Your Deductibles 

Car insurance is undoubtedly expensive, so many people look for ways to save more on insurance premiums. It may seem counterintuitive to add more onto your deductibles to save money on car insurance, but it’s indeed advantageous in your case. How does that happen? 

A car insurance deductible determines the amount you’ll have to pay before your insurance coverage covers the rest of the expenses. Insurance premiums decrease as you increase your deductible. From USD$200 to USD$500 deductible increase, you can save on premiums by 15% to 30%, while a raise to USD$1,000 gives a whopping 40% decrease in premiums. 

 

 

5. Shop Around To Compare Prices 

Comparison shopping is hands down the ultimate way to find the best insurance deal suitable for your needs, budget, coverage requirements, and coverage preferences. If this is your first time to to take out car insurance, it’s perfectly fine to walk out of an insurance firm empty-handed! Asking and comparing car insurance quotes from different companies will help you save more and get the most from your payments. 

 

Takeaways

Looking for a car insurance policy requires significant research and preparation. With varying policy coverage, laws, premium rates, and insurance companies, it’s imperative to know and be prepared for what’s ahead in your car insurance hunting journey. 

Steven Millstein
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