A car insurance policy is one of those things you don’t necessarily want to purchase but you have to if you want to legally drive on our nation’s roads and highways. As a result, many drivers will seek out a cheap car insurance company to help them save as much money as possible on their policies.
That could prove to be problematic because cheap isn’t always best and when your policy is insufficient to cover the costs associated with an automobile accident in which you are determined to be at fault you could be paying for those expenditures out of your own pocket. So what good is your insurance policy? Your coverage is supposed to pay those costs but you chose a cheap policy with bare minimums.
This is not how you are supposed to pick the right car insurance. Before you go shopping around for coverage, you need to know what you are doing as it can be somewhat confusing to choose a policy with so many options for coverage available. One that not only protects you, your vehicle, and other drivers on the road, but also keeps you in compliance with all federal and state laws.
Finding the Right Policy
Every driver is different. Different driving habits, different vehicles, different residence addresses, and different driving records. The policy that you purchase will be dependent on all of these things and as you consider the various coverages that are included in that policy you will need to make decisions based on these factors, as well as the limits you wish to impose for each type of coverage.
All of these things will affect your premiums which is the amount of money you will be paying annually or monthly for your insurance policy. Since most drivers don’t want to pay a lot for their coverage, they will try to strike a balance between having enough coverage while keeping their policy affordable.
The goal is to have enough coverage to ensure that your policy limits are not too low so as to cover all the costs of an accident without paying exorbitant premiums. But while your coverage options will have an effect on what you pay, so will all of the facets of your situation when it comes to operating a motor vehicle.
The Factors That Affect Premiums
Your driving record is a major factor on the costs of your coverage or if you can get coverage at all from a reputable insurance provider. A driving record tells insurance companies a whole lot about you and if you are worth the risk. The insurers take risk into account in their decision to give you a policy. The greater the risk that it is to insure you, the more likely they are to raise your rates or deny you a policy altogether.
If your driving record is rife with previous accidents, speeding tickets, and other moving violations, then you are a much higher risk than if you were a driver with a spotless record.
But hold on a second, just because you have a spotless driving record does not always mean you will get the lowest rates on your insurance. The type of car you drive is also a big contributing factor in determining your premium. Are you driving a mid-size sedan or luxury sports car? The more expensive your car, the more it will cost to insure. That’s because parts and labor for expensive cars are typically more costly.
Sports cars are also at a higher risk of getting pulled over by the police since you have all of that power and speed at your disposal. Insurance companies believe you are less likely to go 90mph in a Prius than you are in an Audi TT.
Your zip code will also play a part in your premiums. The insurance companies have a whole lot of statistics and data on crime rates in every city and borough in the United States. If you live in a zip code that has a higher crime rate or is known for being a hot-bed of car theft, you can be sure you will be paying more for your premiums. Do you garage the car or park it on the street? The answer to that question will play a role.
With all of these things in mind, you can then pick the car insurance that’s right for you. You will want liability coverage, of course. That coverage pays all of the costs for other drivers if you cause an accident. Comprehensive will cover your costs and that may be something you wish to include or avoid. Rental car coverage and uninsured driver coverage are both popular, but may not be worth paying for on a monthly basis.
Determine your situation and choose wisely. But be sure you are fully covered at all times.