Having car insurance is a crucial part of being a responsible vehicle owner. That said, it’s also essential to make sure you have the right type of car insurance for your needs.
If you’ve never bought car insurance before, navigating the market can be tricky. Here are some steps you can take to help you make a smart decision when choosing your car insurance.
1. Decide the Type of Car Insurance You Need
Car insurance is an umbrella term that covers a number of different types of coverage. While each company offers its own unique coverage types and variation, some common options include auto liability, medical payments, collision, and personal injury coverage. Depending on your requirements, you may want to purchase one or more of these options.
Auto liability coverage is the ‘basic’ car insurance coverage you can buy and is a legal requirement in most states in the United States. The other options listed are additional coverage options, which you may need depending on the status of your car and personal preferences. For example, if you are currently paying off a loan on your car, there’s a strong likelihood that the insurer will require that you carry both collision and comprehensive coverage, in addition to the aforementioned auto insurance.
2. Check State-Specific Requirements
While nearly all states in the country require vehicle owners to carry car insurance, laws differ by state. If you need help with your state’s specific requirements, consider checking a car insurance buyers guide tailored to your state for help. It’s also highly encouraged to consult with a specialised lawyer like David Bryant Law to make sure you have all the correct information. Some states will require that drivers not only carry auto liability insurance but personal injury protection as well, so you’ll need to confirm you’re carrying the insurance required of you by law.
3. Decide on the Policy Limit
Your car insurance policy limit is, essentially, the maximum amount of money your insurer will have to pay out in the event of a claim being filed. Each state has a minimum requirement of the amount of car insurance you need to carry. However, it’s usually recommended that you carry more insurance if possible, as you’ll usually need to pay more money than the minimum coverage out of pocket should you need to replace your car or pay for another person’s medical fees.
4. Decide on an Insurance Company
When buying car insurance, it’s essential to take the time to research the various insurance companies you have to choose from. Ideally, you want a company that not only offers the most beneficial policy you also want an insurance company that is financially strong and will be able to pay out any claims you submit. Additionally, you should have an idea of how your insurance company will use your credit score and whether there is an available alternative that doesn’t take your credit score into consideration.
5. Check for Discounts
Your insurance company may offer discounts for car insurance if you are judged to be lower risk. Some reasons that you may be considered to be lower risk include:
- Your age–older drivers are considered lower risk than teens and other new drivers
- Your marital status – married drivers are deemed to be lower risk than unmarried ones
- You have a long record of driving safely
- You have taken and completed a driver training course
Additionally, if you have anti-theft precautions, you may be able to avail of insurance discounts as well. Make sure to check with your insurance company or agent to check if there are any options for lower costs you are eligible for.
6. Make Sure You Have All the Information You Need
Shopping for car insurance requires you to have a lot of insurance easily accessible, including:
- An estimated distance you will be commuting daily, as well as a projection of how many miles you will be driving each year
- Your current auto insurance costs, both yearly and monthly (if you have any), as well as a copy of any existing car insurance policies you currently have
Additionally, you’ll need to have driver’s license information for all eligible drivers in your household, as well as vehicle identification numbers for all the cars you own.
Other information your insurance company will require includes demographic and lifestyle information, like your age, marital status, claims records, driving history, and more. Having all of this information easily on hand will make the purchasing process significantly easier.
Speak to your insurance agent to get an idea of what documents and information you should have on hand, so you can get everything collected and ready for you to start buying car insurance.
When buying car insurance, you should also discuss ways to lower insurance costs with your agent, including bundling your coverage in with other insurances such as home insurance. Once you’ve researched all your options thoroughly and are confident that you’re choosing the right policy and provider for your needs, you can take the final step and make the purchase.