Car Insurance 101: Basics For Purchasing A Policy

Car insurance is one of those things we complain about having to pay for, but it is a necessary expense. Car repairs, property damage and injury to ourselves and others is costly and insurance companies of all kinds exist because these are not things most of us can pay for on our own. If you are shopping for auto insurance ,here are some important considerations to help you get the most appropriate policy for your needs.

Choose a Higher Deductible to Keep Your Rates Low

One of the primary factors in determining premiums is the chosen deductible, or the amount of money the insured must pay out of pocket before making any claims to the insurance company. Naturally, a higher deductible will translate to a lower premium since you are taking on a bigger financial burden; insurance companies like that a whole lot. Now, while we are hoping we never have to use our insurance, we have it because there is a chance we might need it someday. So, if you want to choose a higher deductible to save money, make sure you choose a reasonable amount that you could actually afford to pay should it come down to actually filing a claim.

Deciding on a Coverage Amount

Every state or province typically has its own requirements when it comes to required minimums for liability, medical and other types of coverage. The less coverage you seek, the less money you have to shell out for a premium. Some people may just choose the bare minimum while others go for the whole enchilada so that they are covered for the worst-case scenario. When it comes to your policy, you should carefully consider your needs. Factors such as personal assets should be taken into account when deciding on the amount of coverage and whether you need an umbrella policy to offer additional coverage beyond the maximum. If you have significant assets, you want to take out larger coverage options to protect an attorney from going after them to collect beyond your policy payout. If you personal driving situation presents with factors that increase the risk of an accident, such as your daily commute on a particularly treacherous road, you want to consider these things when putting together your policy.

Opt for Underinsured/Uninsured Motorist Coverage

If you are located in one of the many areas where this type of coverage is not mandatory, you should seriously consider adding it to your policy. While you may never dream of operating a vehicle without inadequate coverage ,or even worse, no coverage at all, there are many people out there who have no problem with this. They are perfectly willing to risk getting on the road every day without the proper insurance and if they cause an accident, you could be screwed big time—chances are, someone without an insurance policy does not have significant assets that can be turned to the cash you deserve.

Comparison Shop

This last tip is pretty obvious, but many people may be missing out on savings because they only look at a couple of sites and then assume that all companies probably charge the same rate for the same policy; while this may be the case sometimes, it is not always. I personally have seen significant differences in prices for similar policies and I only discovered them after committing to really looking at a number of quotes, not just two. Not all companies may show up in sites that compare multiple carriers so if you are not seeing offerings from companies that serve your areas in these searches, contact them directly. If you get quotes directly online, you might want to call the provider anyway to make sure you are getting all available discounts—the online quoting programs tend to have questions that help determine certain types of savings but they may not account for everything.

Kelli Cooper, writing for, is a freelance writer who enjoys sharing tips on shopping for various types of insurance.

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