The vehicle you own, your personal priorities and your budget are factors that influence your unique car insurance needs. Before comparing policies and insurers, evaluate how you use your car and what risks you face to discover which options are best for you.
1. How much do you drive?
Do you absolutely need your car every day, for example, to go to work or take the children to school and activities? Do you drive 100 miles per month or closer to 1,000 or more? Make sure your policy reflects how much you use your car. If you do not drive a lot, you can opt for insurance based on mileage.
2. What type of car do you drive?
Insurers have mountains of data, and they know with precise details what types of cars, brands, and models are more or less likely to incur claims. A striking sports car with a powerful engine can be easier to steal and your body costs will be higher than in a medium sedan, and your insurance will be priced accordingly. Some types of automobiles, such as modified or classic cars, require special insurance. For the same reason, you can receive discounts if you have a “safe” car, one with the latest safety features and a good safety record.
3. Will you use your car for work?
If you use your car not only to go to work but to perform tasks for which you are paid, commercial auto insurance is a must. A personal auto policy will not provide coverage if you transport passengers who pay through a shared transportation service, deliver pizzas, drive as a courier, or use your car for other business activities.
4. Where do you live and park your car?
Where you live will affect your insurance rates, and it can be a factor in the coverage you buy. For example, cars parked on the street in urban areas face an increased risk of theft or vandalism, so comprehensive coverage could be a good option. You may find that your premium rates are lower if you move from a city to a suburb.
5. How much do you love your car?
If you love the appearance of your vehicle and take pride in its appearance, you may want to repair it perfectly or replace it with the same model if it is damaged. That means you probably should consider a complete range of insurance, including collision, comprehensive coverage, and glass. On the other hand, if you drive a blender, see the cars simply as transport and want to save on premiums, you may prefer to limit your policy to liability.
6. Who else will drive the car?
Generally, your car insurance will cover other occasional drivers. However, if other drivers live with you and use your car, be it a spouse, a teenage driver or a housemate, they should be included in your policy.
7. Is your vehicle financed or leased?
If you still owe money on your car or have to return it in good condition when the rent expires, you may need to insure the car for its full value and even for any difference between what you owe and the market value of the car. The collision and integral will cover the damage to your car and the supplementary insurance will cover the rest.
8. What are your legal obligations?
Almost all states require that you have a minimum liability coverage for your car. At the very least, you must ensure that your policy complies with state mandates. However, the levels of coverage required are generally quite low. Keep in mind that, if you are involved in a serious accident, you can be sued for a large amount of money. Depending on your assets and tolerance to financial risk, to be sure, you probably want to acquire a higher level of liability coverage.
Keep in mind that the options and costs of your insurance will also be affected by your age, gender and driving history. Keep in mind also that your credit score can also affect your insurance rates. Once you have analyzed your needs and priorities, and have understood how insurance options will match them, you will be better prepared to make an informed decision about the types and levels of coverage you should buy.
Now that you know your needs, here’s how to choose an insurance company.