What You Need to Know About Car Insurance
Updated: Sep 19, 2020
First of all, car insurance is a legal requirement. Consequently, as long as you are behind the wheel, you have to be insured. Moreover, this protects not just you but all drivers on the road. Despite the fact that we all have it and pay monthly, most of us don’t know much about car insurance.
Of course, we know the basics and what we see on TV. Likewise, we are bombarded with ads from Allstate, Progressive, Farmer’s, StateFarm, the General, and more. Additionally, every company insists that they provide the best and most affordable coverage.
Moreover, they toss out different benefits to entice us. Overall, the buzzwords make it hard to know which is best for us.
So, listed below are explanations of the things you should consider when shopping around for auto insurance.
PAST EXPERIENCE
Experience with your car
Firstly, do you have an older car that might need to be fixed more often? You might want the lower deductible and higher premiums if you know you will have a lot of repairs on the car.
Secondly, have you had many problems with the car before? If your car has a habit of breaking down, you want to make sure you have excellent roadside assistance coverage.
YOUR CAR
Type of Car
Is it safe? Safer cars usually cost less to insure because damage and bodily harm will likely be less in the case of an accident.
Make and model? Certain vehicles cost less to insure, especially ones that are expensive. The more a car costs, the pricier repairs and replacement will be. And, thus, insurance premiums will be higher. Cars with bigger engines and more horsepower cost more to insure because more speed equals more danger. Sports cars come with higher insurance premiums for the same reason.
Anti-theft features? Vehicles with these features generally cost less to insure because they are less likely to be stolen. According to Kelley Blue Book, Hummers, Dodge Chargers, and Cadillac Escalades were among the most frequently stolen cars of 2008. Least stolen cars were the Subaru Forester, Volkswagen Beetle, and Toyota Prius. As this data updates, insurance companies adjust rates accordingly.
YOU
Risk factors
Young? Drivers under the age of 25 usually pay more. Furthermore, drivers from ages 16 to 19 pay the most.
Male? On average, men pay more for auto insurance.
Driving record
Received a lot of tickets? Distracted driving and speeding increase your accident risk and drive up the cost of your auto insurance.
Been at fault in accidents previously? Insurance companies view your past driving experience as a predictor of future behavior. Being safe pays off and being reckless costs.
Finally, have you had a DUI? Driving under the influence is a major sign of a risky driver. People convicted of such an offense can expect to pay more for years to come. This can sometimes amount to thousands of dollars per year.
YOUR POLICY
Coverage
Roadside assistance? It’s important for everyone, but especially commuters and drivers who take frequent road trips.
Personal injury/liability? If you don’t have health insurance or have a very high deductible, you might want to consider personal injury insurance added to your auto plan. In the event of a serious care accident, it will protect you.
Major accidents? Commuting a long way or on roads with a reputation for many accidents might require more extensive coverage.
WAYS TO SAVE
Higher premiums or higher deductible? Auto insurance costs come with a trade-off. Based on your needs, you have to decide if paying more per month for a low deductible is your best option. Responsible drivers who don’t drive often should consider low premiums and a high deductible. Your situation allows you to anticipate that you are unlikely to make a claim.
How many vehicles are you insuring? Often, car insurance companies will give you discounts for insuring multiple vehicles.
Family bundling? When adding new drivers to your account, discounts and incentives can be offered as well.
The Takeaway
In conclusion, when comparing auto insurance quotes, try to keep all of these variables in mind. Know what insurance will cost before you drive off the lot. As an example, cars with a reputation for being cheap to insure include sedans, mid-sized SUVs, and minivans. Look for insurance policies that fit your exact needs. Investigate the ways to save.