Owning a car gives you the freedom to come and go as you please, but it also requires responsibility and can be expensive. There is gas and oil, maintenance, tires and of course insurance.
Establish Coverage Needs
Shopping for a car insurance policy is so much easier if you know what you need. Figure out how much coverage you need in order to satisfy state regulations. Knowing what coverage options are available enable you to compare car insurance policies with ease. Taking the time to research the different types of coverage available is invaluable. Take a look at reviews and customer comments on reputable car insurance sites.
Identify Available Coverage Features
It is important to know what your state requires and what risks you are willing to take on your own.
Collision:
Collision coverage, as the name implies, protects your vehicle in the event of vehicular accident, irrespective of who is held liable. Collision Insurance allows you to be reimbursed for damages to your car, based on the terms and conditions of your policy, minus your deductible amount. Collision will pay out, if the other driver is uninsured, underinsured, or unknown — even if you are at fault.
But if you are driving a $100 clunker you certainly don’t need to pay $1000/year to protect it against damage. On the other hand if you are driving a brand new Lexus it would certainly pay to be covered with a small deductible. The tricky part is between these two extremes. At some point, you need to decide that it is no longer worth paying for collision insurance. If you don’t have collision insurance you might consider doing your own repairs on minor things. Since often 75% of the cost of repairs these days is labor. If you find yourself needing discounts on auto parts, coupons from Discountrue.com, can help you find a deal.
Comprehensive:
Comprehensive coverage, also covers damage to your vehicle but it only, protects you from damages incurred from environmental sources, such as hail or a tree falling on your car. Often collision and comprehensive are bundled together since if you car is valuable to protect against one you probably want to protect against the other as well.
Maintain a Good Driving Record
Look at how many tickets you’ve received in the past. Speeding tickets and other traffic violations which tarnish your driving record, will increase your insurance rates. By maintaining a good driving record you can reduce the cost of your insurance.
Get Multiple Quotes
Don’t just go for the first insurance offer you receive. Shop from multiple insurance providers online. Find a third-party website that compares different insurance companies in an unbiased and in-depth manner. Once you’ve acquired 2 or 3 prospects, request a quote from each insurance company through their website. Being more financially-responsible about car insurance rates can lead to increased financial health.
Evaluate a Company’s Financial Stability
The insurer’s quote might look attractive, but are they financially sound? Do they treat clients fairly in the event of an insurance claim? Visit the National Association of Insurance Commissioners’ website to learn more about the insurance company. Particularly, take a look at the complaints they’ve received in the past from clients. Remember, a company’s financial outlook and attitude affects yours whether you like it or not.
Look for Discounts
Insurers may be willing to give you discounted rates if you’re a member of a particular group or profession, such as army veterans, nurses, teachers, AAA or senior citizen. Some insurance companies even provide discounts to drivers with a defensive driver’s license or whose cars are configured with specific safety features.
Avoid Installment Payments if Possible
Most insurers charge an extra to clients who pay in installments. Based on a survey, insurers charged their clients up to $10 for choosing to pay their bill in installments. If possible, pay your insurance premium on time and in one lump sum. Besides, you get it off your mind and not have to worry about it at a later time.
There are countless more ways to streamline the process of finding the right car insurance policy, but using tips can provide a baseline for anyone to get started saving money on car insurance and building financial health.
These are some great tips, and I appreciate your advice to get multiple quotes when looking for car insurance. I’m going to be moving out to college this fall, and I want to purchase a vehicle to make transportation easier. I want to save as much as possible with that, so I’ll definitely make sure to shop around and get several quotes before I make a decision on insurance, so I know I’m getting the best deal possible. Thanks for the great post!
Thank you for the help. I am going to be buying a new car soon and need to try to find good auto insurance. I am thinking that I want comprehensive coverage, as you discussed. Do you think it is wise to invest in comprehensive coverage?
Justin, That depends, comprehensive can be important on a newer car but once they become less valuable it may cost more than the benefit you receive.
Looking for discounts is really wise when searching for a good auto insurance rate. Comparing the different insurances with the discounts they offer is one way to help narrow your choices. Another discount you didn’t mention that has helped me was a student discount.
Often the student discount is dependent on good grades so be sure to keep those grades up if you want to keep the discount.
I like the idea of getting multiple quotes. That just seems like a smart idea in a lot of things in life. Whether it is insurance, a loan, or getting repair work done on your car. I think if you want the best quality insurance and the best price you need to look around and get actual quotes from the companies.
Getting multiple quotes can help to offer you various options. If you go for the first company you get a quote from, you may not get the best deal. Looking around at the different options can hopefully help you find a good and cheap company to go with.
I have had a couple of tickets on my records. It has been about 5 or 6 years since I got them. Do tickets leave your record ever? I sure hope so. If so I think I need to look at maybe lowering my insurance rates. It has been a long time that I have had a good driving record. I should call my insurance provider and ask.
Kody, Generally tickets don’t affect your insurance rates after 3 years so if your insurance company is still charging you for them you should talk to them. It is also a good idea to shop around every couple years because insurance companies tend to raise their rates for existing customers and offer the best rates to new customers. So switching companies frequently will generally get you the best rates.
Next month, I will be getting my first car, and so that means that I will have to get insurance too. I’m definitely liking the idea of getting some type of discount, but I’m not a veteran, nurse, teacher or senior citizen. However, I am a college student, but do you think that I could get some sort of discount for that on my insurance?
Faylinn, Often students are actually penalized on their car insurance due to their age (usually under 25) but most insurance companies offer a discount for good grades. So if you show your transcript you might be able to get a discount that way.
I totally agree with getting multiple quotes when buying a service. I always talk to at least two mechanics to fix my car, so it makes sense to check with more than one insurance company to cover my car. If you don’t check out the market, you don’t know if you’re getting a good price for what you’re getting.
It is interesting that you brought up the company’s financial stability. This is something that I haven’t thought about before, but you would definitely want a company that is going to last long enough to give you the coverage that you pay for. How would I look into the financial stability of a car insurance company? Thank you!
AMBest is the gold standard in rating insurance companies. You can go here to check out companies. http://www.ambest.com/home/default.aspx
I love how maintaining a good driving record can reduce the cost of your insurance. I have never gotten a traffic ticket before and it feels good to know I can be rewarded for that. It also gives me a greater incentive to be a more cautious and obedient driver, because I want to keep those prices as low as I can get them.
There is some great information about car insurance here. I hadn’t known the difference between comprehensive and collision coverage. Now I know the difference, and know that it’s probably a good idea to have both.