Before You Shop for Car Insurance
Before You Shop for Car Insurance - Shopping for car insurance can be a time intensive process. You need to ask several companies for quote...
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Before You Shop for Car Insurance - Shopping for car insurance can be a time intensive process. You need to ask several companies for quotes so you can find the best deal, but before you do that you need to understand what you need and how much insurance to get. A car insurance policy has several different components as part of it. It is also important to check on your insurance to see if you qualify for better rates. You can shop for a new policy every few years to reduce your premiums.
Liability insurance is the insurance required by law. It will cover the other car if you are in fault in a car accident. It will pay for any injuries to other people, and damages to the car or other property. Each state has a minimum amount of liability you are required to purchase to legally operate the car, but you should determine how much you want to have paid out. The first number listed in under this policy is how much will be paid out per individual for injuries for one accident. The second number is the total that will be paid out for all injuries combined, and the last number covers property damage.
Collision insurance will pay for your car to be repaired or replaced if it was damaged in an accident. The policy will replace your car for fair market value. This means that if you total a car that is ten years old, then the insurance company will issue you a check to buy a car that was in the same condition and age of your car. You will not receive a check to buy a brand new car if you did not own a brand new car. If you have a loan or lease out on your car, then you will be required to carry collision insurance as well. It is a good idea to have collision insurance so you can replace your car after an accident.
This part of the policy covers your car if something were to happen to it other than an accident. Comprehensive insurance covers things like theft, damage from storms and other rare occurrences. You will need this insurance if you have a loan out on the car. Like collision insurance it will cover you for a replacement of a similar value car. The comprehensive portion of your policy is what covers you if a tree were to fall on your car from a storm. It is important to have unless you can easily purchase and replace your current car.
When you do not have a large number of assets you will not need as much coverage. The coverage should protect you in the even you are sued. The more assets you accumulate the more insurance you will need. A basic policy amount would be $100,000/$300,000/$300,000. As you accumulate more wealth you may need to consider an umbrella policy. An umbrella policy will pick up where your other insurances stop and then cover up to $1,000,000 or more.
Your deductible can change the amount of your monthly premium. The lower your deductible the higher your premium will cost you. If you can afford it, then consider getting a deductible of $1,000, which will let you save money on your insurance. Set the deductible amount aside in your savings so you will have it if you need it. The money can be part of your emergency fund or you can have a separate sinking fund for it.
The amount your insurance company charges for a policy depends on your driving records as well as the type of policy you buy. Rates generally drop after you turn twenty-five and if your record is in good standing. You can call and have your car insurance evaluated again if you just had a ticket drop off after three years or if you just turned twenty-five years old. You may be surprised at how much this will save you. In addition you may want to shop around for a new policy at the same time to see if you can find a good rate.
Before shopping for insurance check with your current employer and your alumni association to see if you qualify for a discount through them. You can save ten percent or more with this type of discount. Shopping around you can also ask the companies if you qualify for a good driver discount. If you have more than one person on your policy, listing the best driver as primary driver can also save you money. Getting multiple policies such as your homeowner’s or renter’s insurance at the same company may add an additional discount.
