You and your car together represent a unique combination and you’ll get the best insurance value by shopping for a policy that perfectly matches it. Your coverage should reflect your needs, priorities and budget. You’ll want to evaluate how you use your car, what risks you face and what options you want from an insurer before you compare policies and insurers.
Consider the following questions when you’re getting ready to shop for auto insurance:
Okay, your car is not a family member or even a person, but do you have a very special attachment to it? If so, you’ll want it fixed perfectly or replaced with the same model if anything happens to it. So shop for the fullest range of insurance, including collision, comprehensive and even glass coverage.
On the other hand, if you drive a beater, see cars as interchangeable and want to save on premiums, you might consider purchasing only liability insurance.
Do you absolutely need your car every day, for instance, to get to work? Or is owning a car mostly a matter of convenience that you could forgo if needed? Do you drive 100 miles a month or closer to 1,000 or more? Make sure your policy reflects how much you drive. If you don’t drive a lot, you may want to opt for mileage based insurance.
If you use your car, not just to get to work but to perform work tasks, commercial auto insurance is a necessity. A personal auto policy will not provide coverage if you deliver pizzas, drive as a courier, transport paying passengers through a ride-share service or use your car for other commercial activities.
Insurers have mountains of data, and they know in precise detail what types of cars, makes and models are more or less likely to incur claims. A flashy sports car with a powerful
engine may be more likely to be stolen and cost a lot for body work than a mid-sized sedan and your insurance will be priced accordingly. By the same token, you may receive discounts if your car has the latest safety features and a good safety record.
Where you live will impact your insurance rates and it may be a factor in what coverage you purchase. For example, cars parked on the street in urban areas face a greater risk for theft or vandalism, so you may want to purchase comprehensive coverage. You may discover that your rates fall if you move from a city to a suburb.
Generally, your car insurance will cover other occasional drivers. However, if other drivers live with you and use your car—whether a spouse, a teen driver or a housemate—they should be listed on your policy.
Nearly every state requires that you carry minimum liability coverage for your car. At the very least, you need to make sure your policy complies with state mandates. However, the levels of required coverage are generally pretty low. To be safe, you’ll probably want additional liability coverage. Keep in mind, if you are involved in a serious accident you may be sued for a large sum of money.
If you still owe money on your car or have to return it in good condition when a lease expires, you’ll likely be required to insure the car for its full value and even for any gap between what you owe and the car’s market value. Collision and comprehensive coverage will cover damage to your car up to its value and supplemental gap insurance will cover the rest.
Keep in mind that your insurance options and costs will also be affected by your age, gender and driving record. Be aware too that your credit score can also impact your insurance rates.
Once you’ve looked at your needs and priorities, and understood how insurance options will match them, you’ll be better prepared to make an informed decision about the types and levels of coverage to buy.