Whether a buyer has just driven a new car off the lot or they’re barely making it from Point A to Point B in an old car, they must protect themselves, their vehicles, and other drivers with Auto Insurance. While low rates are important, they mean nothing if the policy has insufficient coverage. Below are 15 things most drivers don’t know about car insurance.
What’s a Minimum?
While buying the lowest coverage amount allowed by a lender or the law will certainly help a driver save money, it won’t help them save at all if they have to file a claim. For instance, if a driver opts for a high-deductible insurance policy, they’ll pay less each month. However, they’ll also have to pay more out-of-pocket before their coverage kicks in. For those who have sizable emergency funds, this may work, but it often costs more in the long term. Consider the state minimum, but consider buying additional coverage.
A Bigger Deductible Can Be Costly
As mentioned before, a larger deductible means lower premiums, but accidents can be costly. If there’s $5000 in damage, a deductible of $1000 means an out-of-pocket payment of 20%. A $250 deductible requires the driver to pay only 5%. It’s important to consider the premium difference on these high-deductible insurance policies.
Discounts are Everywhere
There’s a discount for almost everything, and insurance is no exception. Most vehicles have alarm systems and safety features that bring lower premiums, and a clean driving record can bring savings as well. Talk to an agent about these discounts, and find out which vehicles are the least and most expensive to cover.
Where the State Sets the Rates, Low-Cost Insurance Covers Less
If a driver lives where insurance rates are set by state law, they should think twice about buying a lower-cost policy because it may not offer enough coverage. Check with the state insurance department to learn more about coverage requirements, and learn about developments in state law and insurance regulations.
Policy Bundling Can Bring Substantial Savings
It’s not just part of a catchy TV commercial; it’s the truth. Some insurance companies will reduce auto insurance premiums by up to 15% if the policy is combined with life or homeowner’s insurance. However, it’s important to ensure the proper level of coverage from each policy.
Shopping Around is an Important Step
While loyalty and policy bundling discounts are widely available, it still makes sense to comparison shop at least once per year. According to a recent study, drivers saved over $300 on coverage by switching. These results show how important it is to get regular quotes from the area’s top insurers.
Ask About Rental Car Coverage
After an accident, a driver may need to rent a car, which can get expensive. In these cases, an insurance policy with a rental allowance will be cheaper in the long term than paying full price to rent a vehicle.
While a driver may save a little money by fudging some of the details, such as who’s driving the car and where it’s parked, the savings are almost non-existent compared to the cost of being found out. If the Auto Insurance Company catches a policyholder in a lie, they could face a much higher rate or they could be dropped entirely. When filling out policy paperwork, it’s important to practice full disclosure.
Use the Claims Process Wisely
Insurance is designed to protect a policyholder from serious losses, but rates could rise sharply for drivers who file claims for every minor scratch. If the deductible exceeds the cost of repairs, consider paying for them out-of-pocket instead of filing a claim.
Installment Payments Aren’t Always a Good Deal
Monthly payments are a big moneymaker for insurance companies, and they can cost drivers an extra $10 or more per month. If one can afford it, or if they can save and plan ahead, they should pay for their coverage in a lump sum rather than in monthly installments.
Employee Discounts May Be Available
Some employers have arrangements with insurers to give employees discounts. Drivers should ask their bosses whether such an arrangement is available; professional associations and alumni groups sometimes offer discounts as well.
Using a Vehicle For Work? Make Sure There’s Enough Coverage
If a driver uses a vehicle for work, they may not have as much coverage as they think. Most customers buy personal policies, but if they drive as a delivery person or a salesperson, their policy should cover those uses.
Vehicle Color Doesn’t Matter
It’s a widely-held belief, but vehicle color has no effect on insurance rates. For instance, having a bright red car doesn’t mean someone will drive recklessly; therefore, it has nothing to do with insurance prices.
Cheap Cars Are a Target for Thieves
Many drivers are proud of their cars, but those stolen frequently are chosen because their parts are worth more on the black market. How often a particular car is stolen can have a significant effect on insurance premiums, and drivers should consider this fact when choosing a vehicle and an insurance policy.
Periodically Review Coverage Levels
As a car gets older, the driver’s insurance needs may change. Customers should consider reducing some coverages if the vehicle has minor damage or has reached maximum depreciation. For example, if a car is only worth $1000, comprehensive and collision coverage may not be necessary.
Some may see car insurance as an unnecessary expense, but it provides important protection for drivers, their vehicles, and other motorists. By considering these tips and facts, drivers can make informed decisions when buying Auto Insurance Madison WI.
Different States have different regulations and policies for insurance. The information in this blog may not be applicable for every situation. Be sure to contact a trusted insurance company if you have any questions.