There are a ton of misconceptions and confusing information surrounding insurance for a car, truck or other personal vehicles. In many communities all over the world, insurance is required to legally operate a vehicle you own. Everyone needs insurance to drive a car, but very few know how it works. We want you to educate yourself fully so you can get the best deal with the features that you really need. Read this before you buy an insurance policy and never find yourself caught unawares.
1. An Expensive Car Does Not Necessarily Mean an Expensive Policy
If you are shopping for a car insurance policy at the same time as you are shopping for a vehicle, getting a specific quote for each model you are considering is an important step. A more expensive automobile might have a lower deductible for things like theft or general accidents, so the premium might actually end up costing less than the premium for a more economical car. It is important to figure out exactly the type of coverage that you need and looks for policies that charge less for these benefits.
2. Do you have Insurance for Collision or Comprehensive Upkeep?
This is actually a crucial difference that you should understand. While the comprehensive part of your insurance policy covers any damage caused by the weather, theft or hitting an animal, the collision portion is for any damage sustained by your vehicle when it hits another car or other obstacle. It can also cover any damage suffered as the result of the condition of the roads, like potholes.
While you need liability insurance to protect others on the road, both comprehensive and collision insurance are both optional. However, both types of policies can provide greater protection for your vehicle, so it is important to consider these options.
3. Prices are Set
While it is possible to get a lower premium if you have a policy with a company that offers discounts for performance, the initial price is determined by factors that you have very little control over. This price will be based on things like your age, marital status, geographic location and personal credit score. Studies have shown that young drivers, especially young men, are more likely to be involved in an accident so their costs are higher.
Living in a more urban area can lead to a higher premium, as the crime rate is higher in these areas, so policyholders are considered more at risk. As with many things, a higher credit score means a lower price.
4. You Can Pay Less Over Time
If you are locked into an insurance policy that you are unable to afford, the good news is that you can save some money. Two of the most common ways to do this are to reduce coverage or to raise the deductible. The deductible is what you pay before the insurance will take care of the rest, so if you feel comfortable handling a larger cost in the future, this is a great option. Many companies also offer discounts for impeccable driving, so a clean driving record is also a good thing to have.
5. Personal Insurance Is Not for Professional Purposes
A lot of insurance companies will cancel your policy if you are using a car covered by a personal policy for business purposes. These can include delivering food, engaging in ride-sharing apps, or really any sort of mobile side-gig. If you are using your vehicle for business and get into an accident, you may be responsible for all the damages incurred. Before getting an insurance policy, check to see if your side-gig of choice will be covered by your policy.
6. Letting a Policy Lapse Could Mean a Higher Restart Fee
If you are not driving for a while, or cannot afford your policy, keep in mind that making it active again could drive the price way up. Those who let their policies lapse are seen as more high-risk than those who diligently keep up their insurance. If you will not be driving for any reason, call your company and explain the situation to them. They might be able to work with you and suggest options for your policy that can be a big help.
7. Insurance is for the Car, Not the Driver
It is a common scenario: A car has an insurance policy. This means that anyone driving the vehicle, as long as they are a licensed individual, they will be covered by your insurance policy. Many companies will allow you to make a “white-list” of people who are to be covered under your insurance. This is to make it easier if you are in an emergency or are physically unfit to operate an automobile.