Getting the right car insurance coverage for you.
If you own a car, you are required to have auto insurance in almost all states. It is not only required by law but it is also very important for you as it helps you provide coverage and support, in the event you get into an incident or accident.
Car insurance not only pays for repair of your car if it gets damaged due to an accident, it also provides you coverage if you car is stolen or gets vandalized.
Since it is one of the important decisions to secure your assets, you car in this case. Thus it is very important that you spend time for finding the right car insurance for you.
Shopping for car insurance is important
The price of car insurance varies significantly between states. Many times you will see that it also varies greatly between insurance companies too. One company may be the cheapest in Texas but could be really expensive in Connecticut. As a matter of fact, in some states, a local company may offer you the best price and service.
It is important to note that not all insurance companies are available or operate in all the states. Some smaller companies are available only in a few states and could be the best choice for people living in those states.
When buying car insurance always check the coverage levels. In most cases the state minimum requirements for coverage are too low for many people. Collision and comprehensive insurance coverages are important for newer vehicles but if you still drive an old car and it may not be worth too much, then you should evaluate if it is really worth getting collision and comprehensive coverages for an old car
Therefore shopping around for car insurance quotes is important – rates, policy options and customer service vary greatly between companies in almost every state. If you don’t invest time for shopping around for your car insurance and understanding all the coverage options, you could end up with a hefty monthly payment and a lot of challenges and poor customer service when you need to file a claim.
Factors that Affect Auto Insurance Rates
Insurance policies are always personalized because no two drivers are the same, and therefore their policy cost can not be the same. A car insurance company determines the cost of an auto insurance based the amount of risk that policy may bring to the company.
In other words, the more likely a policy can cost a company in terms of claims or money that they may have to pay out through coverages, the higher risk that policy is.
There are several factors that impact the price of an insurance policy. Some of the key factors are that insurance companies generally consider when setting your rate include:
- Value of your car. Expensive and new cars always cost more to be repaired.
- Your driving history. Speeding tickets and other violations always increase premiums.
- Your accident and claims history. You can not hide from insurance companies, they have access to your history and previous records of claims through C.L.U.E. report. They can access your claims history for the past seven years through this report.
- Your credit score. A good credit history helps you get a better rate from insurance companies as it shows you are a responsible person.
- Your age. Rates are highest for teenagers because they are risky drivers. Rates begin to drop around age 25, and you’ll likely enjoy the best rates in your 50s and early 60s.
- Your gender makes a difference too. It is seen that generally young women qualify for lower insurance premium rates than young men, but the difference diminishes with age.
- Location of your residence or where you park your car. Car insurance rates vary widely by state and also by ZIP code. This is particularly important due to several factors like crime ratings of a zip code, exposure to natural calamities like flood or fire and so on.
- Your daily mileage. Daily commute and annual mileage are an important part for policy price. The more your car is on the road, the greater are the chances that it may get into an incident or accident thus resulting in a higher chance for a claim.
- Are you married or single? Insurance companies usually believe that married people are more responsible than single.
- How much coverage you buy? Higher coverages means more risk for insurance companies thus higher policy price.
Do I have enough coverage or am I paying for what I don’t even need?
It is very important to understand your coverages and limits in your auto insurance policy. Usually it is a good idea to have more insurance than you need as it is all about securing you from unforeseen risks and events. Having said that, we always recommend having at least enough to cover all of your personal assets.
However, certain types of coverage might not be necessary, depending on the car you own. For example, if you drive an old car or in other words if your car’s current market value is less than $3,500 then you should carefully look at your deductible and coverage for collision and comprehensive.
It is highly likely that when you add your premiums amount for collision and comprehensive coverages and further add deductibles to it, it may exceed the amount of coverage or benefit that it provides if something happens to your car and you have to file a claim.