Picking the right car insurance for your vehicle can seem like a scary task, especially since there are many areas you need to understand. However, this topic is less scary when you break it down. We’ve helped lots of first-time insurance shoppers choose a policy, so we know the questions you have. Let us guide you through the answers and you’ll be ready to pick the right insurance in no time.
Why do you need car insurance?
Firstly, you might ask, why is car insurance necessary at all? There are several reasons. For one, it’s simply the law in most states. Requirements vary by state, but you usually need some form of liability insurance to legally own a car. This insurance covers the cost of damage to the other person and their car if you cause an accident.
A car is an expensive responsibility. Even if you’re a good driver, you need to be prepared for things that are simply out of your control. Unlucky stuff such as theft, weather damage, animal collisions, or accidents that are not your fault can quickly add up to thousands of dollars in damage. An insurance policy makes sure that a mistake or bad luck will not result in you going broke!
Is minimum car insurance coverage enough?
Now that you know that you are required by law to secure a minimum amount of insurance, you may be wondering if you can stop there. The smart answer would be no! Liability insurance only covers the costs of injuries and damage to other people when you are at fault, and the minimum limits of liability coverage that most states require are not high enough to pay for many car accidents. Just getting the minimum amount of coverage could leave you to pay for a big part of an accident that you simply can’t afford.
Liability insurance doesn’t cover medical expenses to you or your passengers, damage to your car, or any other kind of problem. You need to be prepared for all kinds of situations, and a minimum insurance policy sadly won’t do that.
How to choose coverage and set deductibles
Now that you know that you need car insurance and that it’s better to be a little extra with it, you’re probably wondering where you should start. It is important to research the distinct types of insurance coverage before you begin.
- Collision coverage helps pay for the damage to your car from a crash with another car or object.
- Comprehensive coverage includes all other kinds of damage to your car, like theft, vandalism, severe weather, or animal collisions.
- Uninsured/underinsured motor insurance covers the costs of another person having insufficient liability insurance if they are at fault for an accident with you.
- Personal injury protection (PIP) covers additional costs of becoming severely hurt in an accident including lost wages or funeral expenses.
You can also get insurance to cover towing/removal, and for a temporary replacement car after accidents. The list goes on and on, so research further to understand which insurance coverage is right for you.
In insurance, there’s a tradeoff to consider between premiums (how much you pay for insurance) and deductibles. The higher the deductible, the lower the premium, and vice versa.
The deductible is the amount you agree to pay out of pocket before an insurance company chips in. Each type of coverage you add to your policy has its own deductible, though liability coverage usually has a $0 deductible.
Setting your premium and deductible is like a trade-off. You need to decide how much you are willing to pay each month, and if you can cover your deductible without ending up with an empty wallet.
You pay the premium monthly, every six months, or yearly, like an insurance subscription.
What do you need to start shopping for car insurance?
Before shopping for car insurance, analyze a few things.
First, what kinds of damage might happen to your car? Think about your commute, the area you live in, the weather, your usage, and your driving habits. What do you need to protect your car from?
Next, assess your financial situation. Do you have enough savings to cover a high deductible? If you need your insurance coverage to pay most of the cost of a claim, set a high premium instead.
Look for an insurance provider with great customer service. Check the company’s reviews. Are they efficient and reliable? If you get into an accident, you want everything to go smoothly and to work with people you can trust. It’s a stressful situation to be in, and you want it to be as positive as possible.
What if I have a classic or luxury car?
If you have a classic or luxury vehicle, protecting your special car requires extra attention and care. Make sure you and the insurance company agree about the value of your car. Choose a careful policy, considering your car’s mileage or unique requirements it may have in the garage. See if insurance companies you like offer specialized classic car insurance. Or, see if your luxury car’s brand has an association that negotiates group insurance discounts.
Choosing the right insurance doesn’t have to be hard
There are a lot of factors to consider when looking for an auto insurance policy, but shopping for insurance doesn’t have to be so complicated. If you know your budget and have an idea of your coverage needs, you’re ready to get a few quotes to compare. If you need help understanding different insurance coverages, getting quotes, or finding a policy, contact Surround Insurance. We’re here to help.