When you get to the next stage in your life where you need to pick a good car insurance policy, many of us will choose the best option we think is available and right for us. What we don’t consider is how many benefits we are getting versus the risks.
Fortunately, it is quite easy to find that happy medium between affordability and adequate coverage. If you ask the right questions, you will for sure get what you want. Asking these five questions below will help you figure out what is best for you.
Do I Have All The Coverage I Need?
The answer to this question will differ depending on what state you are currently living in. At a minimum, most states will require you to have liability insurance, which will cover the cost of accident-related injury, death, vehicle damage, property damage and legal fees.
Once you have met the minimum requirements, your insurance representative will explain and recommend additional coverage options best suited for your budgeting needs. These will normally include collision, comprehensive, uninsured and underinsurance motorist protection. Ask your representative to explain how each one will affect your premium and your out-of-pocket expenses after an accident.
If there are other personal assets to protect, you might want to consider asking about excess liability insurance. This insurance is separate and is a personal liability policy that can kick in to cover costs car insurance leaves off.
Am I Getting All The Discounts And Savings I Can?
The cost of insurance will play a part in determining the coverages, deductibles and policy limits options that are available to you. This is also based on your risk rating, which will be used to determine the likelihood of making a claim in the future. The factors include your age, gender, driving record, insurance score and garaging location of the vehicles on your policy will greatly determine the price of your premium.
There are still discounts available to help lower your premiums. There is also a safe driver program available that provides student discounts for those who qualify, as well as continuous insurance, multiple policies, and multiple cars coverage.
If you are insuring a new car or a hybrid, you may be eligible for an additional discount. How and when you pay can also affect your premium. Your insurer may offer discounts if you pay in full, pay electronically, or by payroll deduction, or even paying on time.
What Costs Will I Need To Cover For Out-Of-Pocket If I Am In An Accident?
How much you pay for out-of-pocket costs greatly depends on your policy limits, coverages and deductibles, as well as the specific circumstance of the incident.
If you are not held responsible for the accident, but the other driver is, they normally will be responsible to pay for any damages or injury that resulted from the incident. However, if the driver who is at-fault doesn’t have insurance, or isn’t covered by any, you may be left footing the bill. Inquire about getting coverage for this through your insurance company.
This will normally be considered collision or uninsured/underinsured motorist coverage. For example, let’s say your car is damaged in a covered accident that you caused, you have collision coverage with a policy limit of up to $10,000 and your deductible is $2,000. If your repair bill is only $1,500, you will pay the entire amount because the amount is lower than the deductible. If you have damages that cost more than $12,000, you will pay a small percentage of that, plus the amount of your deductible, and your insurance company pays the remaining $6,000.
To keep monthly premiums low, it’s better to keep deductibles high and policy limits low. However, if you can’t pay your deductible or accident-related expenses above your policy limits, you will find yourself in a financial crisis. Before purchasing, go over all scenarios with your representative, and work out a premium, deductible and policy limit you can afford.