Purchasing a new car is rewarding; you finally have your own set of wheels and you can enjoy the luxury of traveling without worrying about public transport. However, the costs do not stop there. You have to pay for gas, maintenance, repairs, and most especially car insurance.
Car insurance may be a cost, but it also helps save on your budget especially on emergency cases. For example, accidents are covered by insurance, so you don’t have to cash out on repairs. However, you shouldn’t be complacent and just grab an insurance policy that promises affordable premiums with much coverage.
Why We Need Car Insurance
Car insurance is mandated by law. It not only helps protect you from additional costs due to emergencies but it also protects other people as well. One benefit of having car insurance is when your car gets stolen. Comprehensive insurance covers stolen cars, so you don’t have to shoulder the cost of a new one. Think of it as an “emergency fund.”
Another benefit is during collisions where the driver is not at fault. For example, your car was parked and a tree falls on it because of bad weather. Surely you did not see that coming. It hurts to pay for something that wasn’t your fault. Car insurance will cover damages so you don’t have to pay for repairs.
Fire and flood are also some of the unavoidable mishaps that may happen to your car. This would be beneficial to people who live in areas where flash floods happen occasionally. You never know when these situations may arise so it’s better to have your car insured so you don’t suffer the loss.
Types of Insurance Coverage
There are different types of insurance coverage and it is better to know about them to help you determine what type of insurance you need to get.
Liability Coverage protects you from legal consequences during an accident wherein other people, property, or vehicles are involved. Technically, if you are at fault liability coverage will help you pay it out.
Collision Coverage, on the other hand, pays for damage done to your car in case of an accident or a collision. This is useful in hit-and-run cases
Comprehensive Coverage covers mishaps outside of collision, for example, theft, extreme weather conditions, and fire.
Choosing the Best Car Insurance for You
Shopping for the best car insurance is no easy decision. You need to consider factors such as your parking space, your regular routes, and if your area is mostly affected by extreme weather conditions. Budget is also a big factor because not all people can afford to purchase comprehensive insurance. Here are a few tips on how you can save on car insurance:
· Drive safely – Accidents add to insurance costs. Also, not all insurance policies cover extensive repairs. On the other hand, your car insurance may not cover hospitalization and even deaths. Claiming premiums also add up to your insurance cost.
Compare insurance costs – Look around and compare insurance costs and premiums from different companies. Ask your friends or family for recommendations. Some insurance companies offer discounts on referrals. Compare the terms and conditions of each insurance policy that you research. Make sure that the insurance agents are also easy to reach and easy to talk to.
Deductibles vs. Premiums – A higher deductible means lower premiums. If you want to purchase insurance with a high deductible, make sure you still have some extra money to cover other expenses. Once you pay for the bulk of the insurance, it is less expensive to pay for the premiums. You also get more savings when the duration of your premiums are longer. For example, costs may be lower if you pay for it quarterly than on a monthly basis. Check your budget and see if this is possible.
· Buy a car that is worth the insurance – When purchasing a car, make sure that it is worth the value of insurance. Does it require a lot of maintenance and repairs? Is it too flashy that it could easily be stolen? Can it withstand extreme conditions such as long distance driving? These are just some of the costs which may affect your premiums.
Review coverage as your car ages – As your automobile gets older, its value depreciates. If your car’s value is lesser than the premium, you may want to change the coverage. If you are a safe driver or do not travel long distances, you may drop comprehensive or collision coverage to save on cost. Check the current value of your car online, so you have an idea.
Bundle your insurance – You’ll end up with more savings if you bundle your car insurance with your home insurance. Some insurance companies offer discounts for bundled insurance. It is also easier to get in touch with your insurance company when you do this.
· Maintain a good credit history – Your credit history is a basis for insurers to price your insurance costs. The logic is that people with better credit history file fewer claims.
· Sign up for Usage Based Insurance – The UBI monitors your driving habits. Lower mileage, maintaining the speed, avoid sudden starts and stops contribute to lower insurance rates. Signing up saves you 5% to 10% of your insurance costs.
· Register in roadside assistance programs – Roadside assistance benefits you when you are in out-of-way places. Instead of calling the towing service, roadside assistance helps you wherever you are. You also get available discounts that help save on insurance cost.
· Install safety devices – Safety devices such as dash cams, anti-theft device, or an anti-braking system not only spell safety for your car, but it helps eliminate the dangers of a stolen car. Park your car in your own driveway or in a well-lit area to prevent vandals and carnappers from getting near your vehicle. At the same time, avoid enhancements that are too flashy for your vehicle but don’t serve a purpose. Spoilers are car accessories that have no distinct function and may add to the car’s value but also attracts carnappers and vandals.
· Get referrals – Ask your friends or family to recommended insurance companies. Some companies offer discounts for group insurance or referrals.
· Drive smart – Most insurance companies offer discounts to drivers who have low mileage, drivers who are virtually accident-free, and drivers who have taken a defensive driving course.
Your car’s insurance is like a safety net that guarantees that you don’t lose money in case of emergencies. It is a pain-in-the-neck when you aren’t prepared for mishaps. There may be times that you feel that you have too many expenses and then suddenly, your car gets involved in an accident. Emergencies such as flood, accidents, theft, and natural disasters may cause you to lose your car or pay for repairs.
Choosing the best insurance policy according to your needs is crucial. Do not be blinded by cheap offers and more deals. Look at the fine print. Insurance sales agents only give you the benefits and won’t dwell too much on the cons. It is essential that you compare many insurance coverages from different companies before settling for one. You don’t necessarily have to purchase the insurance your car dealer offers you. Your friends and family may be of great help, too. Don’t hesitate to ask for advice from them.
What do you think of the tips above? Share your feedback on the comments section. Feel free to share this article with your friends and family, too.
Guest Author Bio: David Walker, founder of CarUnderstanding, is a passionate car enthusiast and traveler. He shares great automotive experiences and tips in his blog. If you like to know more about cars and tips, don’t hesitate to visit his blog.