You finally received your auto loan financing. So what’s next in the life of a car owner? Why wondering how to get car insurance, of course!
It really never ends, does it? The list of things we really need to get educated about seems endless. With every purchase or change comes a new inventory of things to understand and make decisions about.
With an auto purchase comes the questions surrounding car insurance. It’s something we’re required to have, by law: once you become a car owner, you’ll need to get car insurance as well. This is one time we can’t bury our heads in the sand and just not buy. Unlike the extended warranty on my laptop, car insurance is a necessity.
We all should know how auto insurance works and how to deal with insurance companies. I have gathered up some quick facts about auto insurance and hope they help you before you buy.
Car Insurance Guide
Here are a few common questions most people have about their car insurance:
1. Why is car insurance required?
Different laws on coverage can apply based on the state you reside and drive in. However, we’re still all required to have and show proof that we have car insurance before we can drive. Auto insurance is necessary as a way to protect us from any kind of liability (legal or financial) if we ever do get into an accident.
2. What kind of coverage can you expect to have?
Car insurance typically includes three coverage areas that aim to give us protection from liability and loss:
- Medical coverage: This type of coverage covers your medical bills and treatment, and may extend to covering your any work pay that you lose or even funeral costs that may stem from an accident.
- Property coverage: Any losses you experience from theft or damage to your vehicle may be covered through this clause.
- Liability coverage: Damages or injury that occurs to anyone else due to an accident you are involved in (or may have caused) may be covered through this clause.
3. How are your auto insurance rates set?
In order to set your insurance rate, your insurer looks at several things: your age, your vehicle’s make and model, your driving record, what type of driving you do, where you drive, how you maintain your car, where your car is located, and surprisingly, even your credit history.
4. Why do insurance rates vary across different companies?
You may be surprised to find that depending on the insurer you approach, you can receive different quotes for auto insurance rates. This is because each insurer’s rates are based on the history of claims made to their outfit and can also depend on their business and operational costs. It is therefore advisable that you shop around and ask for quotes from many car insurance companies in order to compare rates and so that you can make the right choice for your needs.
5. What can you do to keep your auto insurance rates down?
- The cleaner your driving record, the lower your rates.
- You can get discounts by being a good driver, by installing anti-theft mechanisms in your car, having a fuel efficient car, having multiple cars with the same issuer and being a loyal customer. Speak to your issuer about what discounts you are eligible for.
- Get a policy that allows you to have a higher deductible. This would mean that you’ll pay more out of pocket, but your premiums will be cheaper.
- Pick safer cars to drive.
- Trim your coverage to only what’s necessary. Many people have more than they need in coverage and they’d be able to lower their rates by simply dropping the unnecessary extras.
- Shop around and compare policies across different issuers. Get quotes from different insurance companies to get a sense for how much the policies cost.
6. Who can cancel my insurance policy?
Well, aside from yourself, you may be surprised to learn that your insurance company can actually cancel your insurance policy under certain conditions. They can cancel your coverage if you are unable to pay your premium or if you lose your driver’s license. The consolation here is that they are required by law to give you a heads up before they yank your insurance from you. You’ll receive at least 30 days notice plus any refunds due you if you’ve paid your premium in advance.
Selecting an Auto Insurance Company
Selecting an auto insurance carrier is not always an easy thing to do. Some research on an auto insurance company can really pay off in the long run. You may need your insurance company at a time when you are vulnerable, physically and financially. To help consumers out, many companies — such as A.M. Best and Moody’s Investor Services — rate insurance carriers.
The insurance company’s customer service and satisfaction rating will be key in any decision. You can check a car insurance company’s customer service record by calling your state department of insurance and the Better Business Bureau (BBB). Ask around and check with your coworkers, friends and family. Find out what auto insurance companies they are using and what type of service they have encountered with those companies.
What Car Insurance Should You Get?
There are many options for buying car insurance in this day and age. You can buy a policy online, over the phone, or face to face by using an agent. Some people are comfortable purchasing insurance over the Internet or over the phone, and some would prefer to have a local insurance agent they can meet with in person. Decide which method suits you best, and make sure your insurer of choice can accommodate your style and needs.
Price may be your number one concern when purchasing car insurance. While this is understandable, you should always make sure to get a policy that meets your insurance needs. To find the best price on your auto insurance, comparison shop and get quotes from multiple insurance carriers. As with any major purchase, compare policy features and coverage as well as price. While features may differ slightly, try to compare “apples to apples”. Understand exactly what you are insuring and what you are getting for that price.