Auto Insurance
Auto insurance shopping tips
Auto insurance regulations vary from state to state, which means you'll have to purchase different amounts of insurance and different coverages depending on where you live. Most states have a law somewhere that requires people to have auto insurance, or other proof that they can pay for damages they might cause in an auto accident.
The rules of common sense also dictate that you buy, at the very least, liability insurance. If you cause an accident (and it can happen to anyone), you're going to have to pay for those damages. Liability insurance will pay for medical bills, lost wages and property damage up to the limits of your policy. If you don't have liability insurance, then you may end up paying for those damages with your assets, your home and your wages.
Know what you're buying
The first thing you need to do is educate yourself about the thing you're buying. Find out which coverages are required in your state, which coverages you really need, and which coverages you can do without. For more information about the different kinds of auto coverages, give us a call.
Keeping costs down
Regardless of where you live or what you're required to buy, there are some things that you can do to make sure you're getting the best deal. The most important thing to do is shop around. Call as many agents or companies as is humanly possible. Yes, we know it's a drag and it takes a lot of time. Yes, we know that you may have to answer the same questions repeatedly. But look at it this way: Would you walk up to the first house you see and decide to buy it? Would you buy the first car you see in the dealership? Doing a little research can save you hundreds of dollars a year in premiums.
All that being said, price is not the only factor to look for when you're shopping for insurance. It's also important to look at the company that's actually going to be paying your claims.
Here are a few other shopping tips:
- Maintain a good driving record.
- Ask about discounts.
- Take the highest deductible you can afford on collision and comprehensive coverage.
- Before buying a vehicle, determine the cost of insuring it. High-performance vehicles usually mean higher insurance rates. And if you're financing your vehicle, chances are that the bank is going to make you take out comprehensive and collision insurance, which will drive your insurance costs up.
- Stop driving your car to work. Insurance companies charge higher rates for cars that are used for commuting. Switching to mass transit or a van pool is a plus for your community and the environment. It can be good news for your family's budget, too.
- For cars with a market value less than $1,000, consider forgoing comprehensive and collision insurance. You may be paying more in premiums than you would receive if your car got damaged or stolen.
- If you're a young driver, see if your parents will add you to their policy. While the overall premiums will balloon, you'll probably be paying less than you would if you tried to get a policy on your own. Young drivers can also get good-student discounts with some companies.
- Make sure you pay your insurance on time. If you're canceled for non-payment of premium, it's going to be harder to find a company willing to cover you.
- Review your policy periodically and update coverage accordingly.
