In all states, drivers are financially responsible for paying for any damages that they cause while operating their vehicle. This includes paying for vehicle damages, medical expenses, property repairs and more. The cost of a car accident can be staggering, and many states have a minimum auto insurance requirement in place to ensure that drivers can reasonably cover the cost of these various expenses. Some car lenders also require drivers to maintain a car insurance policy until after the car loan has been paid in full. This is to ensure that the vehicle that is secured by the car loan can be repaired or replaced as needed. While most drivers may initially think about buying car insurance to comply with these various requirements, car insurance also benefits the driver financially in many ways. Now that you are ready to buy a new auto insurance policy, walk through these steps to set up coverage that is right for you.
Understand the Different Types of Auto Coverage
The most common types of auto insurance are liability, collision and comprehensive coverage. Your insurance company may also offer personal injury coverage, personal property coverage, uninsured motorist coverage and more. The state and lender requirements for auto insurance coverage vary, so you need to research the requirements in place for you. These requirements serve as the minimum amount of coverage that you need to buy, but many drivers opt to buy additional coverage to enjoy their financial benefits. For example, if you cause $50,000 worth of damage and your insurance policy only covers $40,000 in damages, you are still financially responsible for the extra $10,000. Buying more coverage may decrease the risk for this potential financial loss. Your insurance agent may help you to determine the need to purchase more than the minimum amount of coverage required.
Determine Your Budget
Your personal budget may also dictate the types and amount of coverage that you purchase. You will need to find affordable coverage to meet basic requirements, but you may prefer to increase coverage limits or add optional coverage types to your policy if you can afford them. Your insurance agent should be able to tell you how much it would cost to add additional coverage to policy. This information can help you to set up coverage that is most well-suited for your needs and that inspires confidence on the road.
Choose a Comfortable Deductible Amount
Your coverage types and limits directly impact your premium amount, but other factors are at play as well. One of these factors is the deductible amount that you select. Each time you file a claim, you are responsible for paying the deductible. A typical deductible amount is $500, but you can opt for a higher or lower deductible. Choosing a higher deductible can yield a lower premium for regular monthly savings. However, you should be able to afford to pay the deductible at a moment’s notice if you need to file a claim.
Compare the Options
As you compare coverage options available through different insurance providers, you will notice that the types of coverage available and the premiums vary dramatically. You may also discover that you qualify for more discounts or credits with some providers than you do with other providers. In addition to focusing on cost, research the companies. Look for reviews or feedback related to how providers handle claims, how billing disputes are handled, if premiums are raised after a single accident or traffic citation and more. These are all factors that should be analyzed so that you can thoughtfully select the right provider to buy coverage from.
Buying auto insurance is a necessary component associated with driving. As important as it is to set up the right coverage today, understand that your needs may change in the future. In addition, auto insurance providers’ coverage options, pricing, and other factors can also change. With this in mind, consider reassessing your coverage annually so that you always have the most effective and affordable coverage in place.