There are several things to consider when choosing the best insurance policy for yourself, including your driving record, your budget and the types of coverage that are out there that may be relevant based on your vehicle, location or driving habits.
Here are four helpful tips for finding an insurance provider:
Tip #1: Consider Your Driving Record
Your driving record will affect your insurance rates because insurers see your history of driving as an indicator of how you will drive in the future. If you have a clean driving record, they’ll expect you to continue to be a safe driver. However, if you have a record of speeding or if you have been in several accidents, they may consider you to be a “high risk driver.”
If you have accumulated a number of points on your license, you’ll likely be subject to paying higher insurance rates. You will be classified as a high risk driver and automatically subject to higher rates because you are more likely to get into an accident and make an insurance claim than someone not classified as a high risk driver.
A DUI on your record will classify you as an “extremely high risk driver,” and will likely cause you to face even higher rates. If you’re classified as an extremely high risk driver, some insurers may not allow you to renew your policy.
Tip #2: Explore the Different Types of Coverage
There are a variety policies available to individuals seeking auto-related insurance.
These include:
1. Collision Coverage: Your vehicle will be covered if it gets destroyed or damaged in an accident. Coverage will be provided if you crash into another car or an object (like a tree). You’ll also be covered if you flip your car over. Whatever the case may be, some or all of the repair and costs will be taken care of by your insurer.
2. Liability Insurance - Two Types:
a. Bodily Injury Liability Insurance Coverage: In the event that you’re at fault for hurting yourself and/or passengers, this coverage will help with medical bills and funeral expenses, loss of income from no work, care from a nurse, pain/suffering, which is determined by the court, and more. Note: insurance will not cover intentional harm/damage.
b. Property Damage Liability Insurance Coverage: Similar to bodily injury liability, this covers if you’re at fault for damaging someone else’s property. Each policy varies on what it offers, so read carefully and choose wisely. Repair and/or replacement costs for property such as fences, trees, houses and vehicles are usually covered. Note: insurance does not cover damage you caused to your own vehicle.
3. Comprehensive Coverage: In the event that a natural disaster damages and/or destroys your car, you get hit by an animal or your car gets stolen, this extra coverage typically protects you from each of these instances. Note: before adding this coverage, make sure you fully understand the details of your other policies to see if this is necessary or redundant to purchase.
4. Uninsured /Underinsured Motorist Protection - Bodily and Property: Car accidents are inevitable and in the event that you’re hit by someone that is underinsured, the repair can still be costly. These types of coverage handle expenses that could not be covered initially. New York residents are required to have UM coverage.
5. Medical Payments: It’s easy to forget that medical bills can prevail post-accident. With this coverage, your medical bills will be taken care of no matter who is at fault. Some insurers will also pay medical expenses for other passengers that are injured, provide dental care or cover funeral costs.
Tip #3 - Estimate How Large A Deductible You Can Afford:
A deductible is the amount you pay before the insurance company can cover your claim in full (the money you agree to pay when you file an insurance claim for you car). For example, if your deductible is $400 and the repair cost is $900, you’re responsible for the first $400. Typically, the higher deductible you pay per claim, the less the coverage costs each pay period. Note: Not all coverage plans have deductibles.
Tip #4 - Consider What Car You Have (Or Plan On Buying)
This tip will save you from paying higher rates to insurance companies. Insurers look at the year, brand, and model of your car when providing your rates. If you have or plan on buying a luxury brand, rates will certainly be higher because the car parts will cost more to repair/replace. Having an older car or a non-luxury brand will leave you with more affordable rates. Take the time to financially plan whether you can afford care insurance for a luxury brand.
Considering these tips, financial planning and careful thinking will leave you with the best and most affordable insurance plan. You’ll be able to pick and choose the coverages that apply to you and invest in what is necessary. Best of all, you will have coverage and protection that provides value and reassurance every time you need it.