Having a car of your own can be one of life’s most liberating experiences. The buying of a new car brings many prospects linked with freedom and a sense of pride. Thus, we see car commercials fantasizing about driving into the open, broad horizons. With the wind blowing in the hair and nothing screams freedom as much as a car commercial. Things To Know Before Buying An Auto Insurance
However, owning a drive of your own comes with an even greater financial responsibility, which means having car insurance. Whether you are buying a car for the first time or are still deciding to get one soon, finding the right car insurance plan can become an unnerving task.
But the journey of finding a plan that suits all your financial and auto needs can be turned into a fruitful experience if it is prepared for properly.
Let us first understand the very need to purchase auto insurance with the hopes of never having to use it. Auto insurance comes in handy in the event of your vehicle being stolen, vandalized. Sometimes there is an accident in which you could be at high risk for huge financial burdens when they occur with covering the costs on your own.
Now comes the question of how much money is it that you will have to spend to have your vehicle insured. With some preparation, you can get a good policy with the right coverage types for a suitable and good price.
What is a Deductible?
Deductible refers to the sum of money you’ll have to pay out of your own pocket following the accident before your insurance starts to cover the damage.
Usually, most people find it relatively easier to opt for the lowest deductible possible, but that in return ends up in paying a higher monthly premium or out-of-pocket expense. Whereas, a higher deductible will lower your monthly payment; hence, choosing a deductible that best suits your budget is better. A higher deductible can save you money in the short term and might be the smartest choice. If you have saved money to cover your deductible in the event of an accident. But if you can afford it, a low-deductible plan will assure that you won’t have to spend a higher amount out of your savings to pay for car bodywork or car repairs resulting from an accident or a wreck.
Types of Car Insurance
- Liability insurance. This pays for damage you cause to others’ property, for example, if you hit another car or your neighbor’s fence. It also pays for injuries that the other person has incurred in an accident and for legal defense costs if you get sued after an accident. It is according to your choice, the minimum required to drive legally in your state or a higher amount. Liability insurance does not cover damage to your car. It is required in most states.
- Collision insurance. This coverage pays for the damage that has been caused to your car from an accident, regardless of the fault. And also for damage if you hit another object, like a guardrail or a fence. Coverage Insurance is optional unless you finance your car. It pays out up to the actual cash value of your car in the event your car is totalled. It comes with a deductible, where you choose the amount, and if you file a claim, it is reduced by this amount.
- Comprehensive insurance. This coverage also protects your car. It is optional and comes with a deductible. Comprehensive coverage pays for any damage due to fire, hail, flooding, vandalism, falling objects, and animal strikes—for instance if you hit a deer or even theft. It will help payout up to the actual cash value of your car when it’s totaled.
- Other types of coverage. Depending on the laws of your state, you may be required to buy or are offered additional coverage such as uninsured motorist coverage or personal injury protection.
Look for Discounts : Things To Know Before Buying An Auto Insurance
Car insurance companies offer a variety of discounts based on several factors like:
- Having a clean driving record can net you some big savings of up to 26 percent. According to Geico, and 45 percent according to Allstate, because it shows you’re less of a risk.
- Security and safety features can also translate into savings. Front and side-impact airbags reduce the risk of injury.
- Whereas the security alarms lessen the risk of your vehicle being stolen, therefore limiting the exposure to the insurance company.
- Booking car insurance with the same company may decrease the rates even further if you have a homeowners’ insurance policy.
- With all the preparation and acquired knowledge, you are all set to purchase an auto insurance plan that suits your requirements best and covers your vehicle to the best safety net it needs.
