Auto insurance is a contract between a vehicle owner and the insurance company that covers the risks of driving the car and possibly causing an accident. In the U.S., up to 50 states require drivers to have a mandatory active auto insurance policy.
There are several auto insurance providers on the market. Therefore choosing a reliable one can be an uphill task. Here we share valuable tips to use while buying an auto insurance policy for your car.
Let’s jump straight in.
Know The Coverage
Car insurance policies have different coverages or risks they cover. It’s essential to know the scope of your car insurance. Among the types of car insurance that exist, it’s worth mentioning the following coverage types;
- Third-party insurance is the most basic and covers civil liability. It’s the risk you expose to other people or property that may result in injury or damage. It also covers the expenses if the other person files a claim against you.
- Supplementary or additional liability insurance is an optional policy that protects you against property damage or injury claims when driving a ride-share, moving vehicle, or rental. It can also extend to windows and cranes in case of a breakdown.
- Total coverage covers all risks associated with your vehicle, including damage and theft. For instance, if you hit the car in front of a stop sign, the total coverage or comprehensive insurance covers both vehicles’ repair expenses.
- Insurance with deductibles is similar to total coverage. However, your insurance implements additional premiums to cover deductibles in case of repair or damage.
- Even with auto insurance, you can consider assurance – financial coverage that compensates you in case of death. Compare car insurance with assurance products and decide whether it’s practical to pay for an extra cover depending on your budget.
Know The Different Factors That Can Affect The Premiums
Your auto insurance depends on factors such as age, gender, place of residence, type of use, driving record, and type of vehicle.
Financial stability, or credit history, is an important aspect your insurance provider may consider.
The coverage you choose may come with deductibles representing the amount you will have to pay in the event of a claim. Generally, the higher the deductible cost, the lower the monthly premiums.
Before you decide on the best insurance product that meets your needs, shop around and compare different products. You can compare the differences in monthly premiums, deductibles, and coverage or protection.
Further, you can check online reviews for your insurance provider to know if they’re reputable. Online reports and reviews from companies, such as Standard & Poor’s, Moody’s, and Fitch, can help you interrogate the financial health of your insurance provider.
You can also look at the independent opinions of past users and find out if they’re happy with the services. If many people complain about poor customer service or delay in claims settlement, it’s a red flag; hence, you should avoid it.
Know About Expiry or Renewal
When your auto insurance expires, it automatically renews under the same conditions. However, your insurer may send you a written notice before the expiry date for any changes.
You can cancel auto insurance by notifying your carrier in advance. Typically, it’s contained in the terms and conditions. Most providers will refund you the premium for the remainder of the term if you adhere to the conditions.
Also, check if there are clauses about denial of insurance policy or cancellation. Usually, your provider may deny you auto insurance if you’ve made several claims in the past and have an existing criminal record.
Check if They Offer DIscounts
Most insurance providers offer discounts to their customers. However, the offers may depend on several factors, such as positive grades on your policy. Also, some carriers may have discounts for drivers with low average annual mileage.
Additionally, you may get a discount if you take a driving class and have installed anti-theft gadgets on your car. Ask your provider the available ground for discounts as it can lower your overall insurance costs.
Moreover, you can update your provider on reduced mileage during the policy as you may qualify for a lower premium and save money.
An auto insurance policy for your vehicle protects you from incurring a higher deductible or out-of-pocket expenses in an accident. It also covers the risks from third parties should they file a claim against you. Don’t hesitate to talk to your insurance provider and ask any questions you may have about car insurance.