There is so much to learn about driving, and a surprising amount of it does not take place behind the wheel. Learning how to navigate your first car insurance policy plays a big role in making sure your car, its passengers, and you are well cared-for when you’re out on the road. When it’s time to purchase your first policy, make sure you’re prepared for your search.
Here are some tips for how to go about setting up the right auto insurance policy:
Choose the Right Car Insurance Company
Start your search by simply looking for “affordable car insurance online” to get an idea of your options. Start with a budget in mind so you do not end up with a monthly payment you cannot actually afford. If finding an auto policy within your budget is the most important aspect of your search, then consider choosing an insurance company that lets you choose your down payment, the day of the month that you make your payment, and in turn, your monthly payment amount. If you meet face-to-face with a car insurance agent, make sure that they are someone you will be comfortable working with in a stressful situation, because when you need to contact them again, it may very well be after a nerve-wracking scenario like a car accident.
There will be several parts of the auto policy your agent will cover with you to help you determine the type and amount of coverage that could fit your individual circumstances: your state’s minimum coverage requirement, your deductible, and your policy term length. Be honest and open about your needs and above all, don’t be nervous; your agent is a professional and has dealt with dozens of new drivers. He/she should be happy to answer any questions or concerns you may have.
Talk about the Right Kinds of Insurance
Your state will require a specific minimum amount of insurance before you are allowed to drive, but sticking to the minimums may not be the best way to go, particularly for a new driver. You should also consider:
- Collision Coverage: This coverage helps pay to repair or replace your car if you’re in a covered accident that involves other vehicles or stationary objects. Note that if your vehicle is financed, you are likely required to carry this coverage.
- Comprehensive Coverage: If your car is stolen or damaged in an event other than a collision (like a fire, natural disaster, or contact with an animal), this coverage will help pay for it to be repaired or replaced. This coverage may also be required if your vehicle is financed or leased.
- Uninsured Motorist Coverage (UM Coverage): Your uninsured motorist coverage will help pay for the medical and related expenses you incur if you’re injured in a car accident and the driver who is at fault does not have liability insurance, cannot be identified, or in some states does not have sufficient insurance to cover your claim. Some states require uninsured/underinsured motorist coverage.
- Personal Injury Protection (PIP): This coverage helps pay for certain medical, hospital, and funeral expenses, and/or lost wages incurred by you, residents of your household, passengers in your insured vehicle, and pedestrians when injured in an auto accident regardless of who is at fault. PIP is mandatory in some states.
Ask your agent about each of the above coverages, which ones are required in your case, and the level of recommended coverage .
Talk about Choosing the Right Deductible
The higher your deductible, the lower your monthly payment will be. Collision and comprehensive coverages often include a deductible. This is the amount of money you would pay out-of-pocket, up front for the damage to your car after an auto accident. However, if your deductible is higher than you could afford to pay if/when you get into an auto accident, you may struggle to come up with the money. On the other hand, a low deductible (such as $100) may not be wisest either. It could be in your best interest to pay for small repairs out of your own pocket instead of filing an insurance claim, as filing a claim could raise your overall rate. Bottom line: work with your agent to find a dollar figure you would be comfortable paying out of pocket in the event of an accident, along with a premium that fits within your budget.
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