So you finally got a car or a truck and you’re ready to hit the road, but there’s just one problem: You need insurance. Finding the best plan and the right coverage can be difficult, especially for a first-time buyer. Knowledge is power in the insurance world, and knowing your options will help you find out what’s right for you. When shopping for insurance, keep these things in mind:
The Basic Types
Almost all car insurance falls between two categories: Liability and comprehensive coverage. Liability coverage is a type of “bare bones” insurance which just pays for damage to another driver’s car that you might get in an accident with. On the other hand, comprehensive insurance will also pay for your own damages to your car in an accident with another driver, as well as pay for repairs to your car in other scenarios such as hitting an animal or car theft. Between this, most insurance agencies offer other packages that might cover both drivers in an accident, but won’t cover the extras covered in comprehensive insurance.
Generally speaking, the kind of coverage you need depends on the kind of car you have. If you’re driving an older car that has a lot of mileage on it, liability insurance might be the best option. It’s cheaper, fits the basic requirements for state laws requiring insurance, and since your car’s value is so low, chances are comprehensive coverage wouldn’t really be worth it anyway. On the other hand, if you have a brand new car, comprehensive coverage is the best way to go. It costs quite a bit more, but it’s worth it if you get in an accident and need your car repaired or replaced.
The Basic Factors for Insurance Prices
The cost for different insurance plans depends on two different sets of factors: Those relating to the driver, and those related to the car.
For the driver, the four factors that typically effect car insurance prices the most are age, gender, location, and most importantly, auto history. Younger drivers, especially those under the age of 25, typically pay much higher rates than more experienced drivers. Male drivers also pay higher rates that females, due to statistics pointing to men being riskier drivers overall. Certain locations also have higher rates, once again coming from statistics indicating a higher risk of accidents in a given area. And finally, the driver’s auto history has a major effect. Years of safe driving will typically lower your rate, while any kind of traffic violation or accident will most likely bump up your rate next year.
For the car, it’s a lot simpler. Basically, the higher the value of the car, the more you can expect to pay for car insurance. The car’s value is determined by things such as age, model, and the car’s history of accidents. For this reason, insuring older cars can be a lot cheaper than insuring a brand new one.
Other Things to Remember
Here are a few final tips for finding the right auto insurance.
- Shop around! You’d be surprised how big of a difference in price you could find just by looking into different insurance agencies.
- Many times, insurance agencies will have lots of perks and discounts for their customers. Be sure to ask about them when talking to an insurance agent. It could save you big bucks in the long run!
- There are often lots of other types of added coverage that can be added on to your insurance plan for just a small price increase, such as uninsured motorist protection or personal injury protection. Ask about these and consider paying a little extra for it if you can afford it. They can cost as low as an extra $15 a month, and it’ll definitely be worth it if you get in that kind of a situation.