It’s always a little scary when you have to cut your safety net and take the plunge. Flying solo can be intimidating, especially when you’re shopping for something as important and yes, complex, as your first auto insurance policy. Unless you happen to speak insurance-ese you can be left feeling like you’re just spinning your wheels! Sit back, relax. Here’s a frank look at what you need to know to be a savvy shopper when you’re shopping for your first auto insurance policy.
The first thing you need to know is what kind of auto insurance coverage you need. There are four major types of insurance coverage:
1) Liability. Most states require you to have liability, because this is the insurance coverage that’s going to pick up the tab if you happen to run into someone else out on the highways. Your liability covers personal injury claims, vehicle damages and damage to personal property. Needless to say, you don’t want to hit the road without it!
2) Comprehensive. Comprehensive insurance covers your car against “Acts of God,” like that branch on the elm in your front yard finally giving up the ghost and crashing down on the roof of your Taurus. Without comprehensive you’re going to be picking up the tab for those damages yourself.
3) Collision. If you’re in an accident your liability insurance is going to cover the damages to other vehicles and property, but it’s not going to do a thing for your own. Collision will step in to fill the gap so that you’re not left without a car for weeks or even months after an accident until you can come up with the money for the repairs you need.
4) Uninsured Motorist. With climbing gas prices and a crumbling economy more drivers than ever are hitting the roads with barely adequate insurance, if they have insurance at all. Your uninsured motorist auto insurance will pick up the tab if you’re in an accident with one of these short sighted individuals, rescuing you from years of court battles in an attempt to get the compensation you deserve.
Now that you know all the players, let’s talk about how much you’re realistically going to need to cover your auto insurance claims-and how you can get that coverage cheap.
Unless you live in a no-fault state you’re going to have minimum liability requirements for your auto insurance; however, just enough is almost never enough! Most experts recommend you carry a minimum of $100,000 per person and $300,000 per accident in liability and no less than the total value of your vehicle when you bought it new for your other coverage.
Cheap auto insurance, even at the higher levels mentioned above, isn’t as hard to come by as you might think. There are three things you need to know when you’re shopping around for auto insurance quotes:
1) Shop around! Yes, it’s a little redundant, but remember-there’s no such thing as one size fits all when it comes to auto insurance companies. They each have their own rules, which means they each have their own rates. If you’re going to get the best deal possible on your auto insurance coverage you need to look around to see who’s going to give it to you. Nine times out of ten your first offer isn’t going to be your best.
2) Discounts. Seriously. You’d be amazed at what can save you money when it comes to your insurance coverage, so make sure every safety and security feature your car has is cataloged and working in your favor, along with your own profession, credit score and driving history, before signing on the dotted line.
3) Raise your deductibles–but not too high. The general rule of thumb is the higher the deductible, the lower the premiums. Don’t set your deductibles so high you’ll never be able to come up with the money, but try to avoid the minimum options if you can. You can save yourself hundreds a year in premiums by raising your deductible from $100 to $200, so make sure you’ve explored all the opportunities.