How to Determine the Right Auto Insurance for You

How to Determine the Right Auto Insurance for You

October 17, 2018

When talking about the bare necessities of a good driver, you need three things: a car, a license to operate it, and insurance to give you a safety net should something happen. Car insurance is mandatory in every state outside of New Hampshire, and the market is as elaborate and complicated as the engine that’s keeping your wheels turning on the asphalt.

Navigating the shopping process is daunting if you try to figure it out all at once, but if you break it down into individual steps and tackle each individually, you’ll save yourself a lot of stress, and likely some good money at the same time. So, when it comes time to start looking, your approach should be two-fold:

First, you’ll need to consider your own needs, including the specifics of how you use your car, your budget, and what damages you’re willing to risk while out on the road. Then, once you’re armed with a list of your expectations and the amount that you’re able to commit, you’ll want to start comparing policies to determine the most coverage that you can get for your budget.

There’s a lot to unpack in both situations, so let’s break them down further to give you an idea of what details you have to consider before making a final decision.

How much car insurance do I need as a driver?

Step one is about recognizing the particular characteristics of your vehicle and your role as the driver. Keep in mind that many of the fundamental factors that determine the amounts you’ll pay are based on pieces of your life outside of the insurance planning process: pre-existing things like your age, driving record, type of vehicle, and credit score all play a role. Your job is to minimize any damage that these things may have in raising prices for you and shaping your list of needs around the resultant budget. Ask yourself these questions:

  1. What am I willing to risk?

Insurance is like gambling: you have to decide how much money you’re willing to put down now on the chance it pays off later. It may not: you may end up spending extra money to cover uninsured drivers or collision damage that you end up never actually using. But consider the inverse: getting in a more serious accident and having little, if any, money to cover the particulars of the situation and being left with an enormous bill that you suddenly have to pay yourself. Ideally, you’d be able to have a great deal of coverage for any possibility, but most of us can’t afford that. As such, you have to pick and choose. What mishaps are you most likely to face, and would you be able to pay for the consequences if they occurred?

A general rule of thumb: the more you can get, the better, but prioritize. Liability coverage always comes first, and you want to have a decent amount of it since the cost of both medical and vehicular work is exceptionally high and adds up very, very quickly. After that, what else you should snap up depends on the subsequent question:

  1. What do insurance coverage do I already have?

Next, take a look at the other insurances you have, and ask yourself these questions:

  • Is your insurance coverage strictly monetary or tied to other plans?
  • How extensive is your existing medical insurance? If it’s already pretty good, personal injury protection and/or medical payment insurance would be much less critical to have.
  • How much money is in your savings?
  • What are your credit limits?
  • Could you afford to cover damages if you’re hit by an uninsured driver, or your car is totaled?
  1. How much do I love this car?

A car is an investment, but how important a particular one is to you plays a significant role when covering it. Is your car’s appearance vital to you? If so, you’ll want it fixed perfectly or replaced with the same model if it gets damaged, and that means you’ll need a full range of insurance, including collision and comprehensive. If you drive an older model, unless it’s a vintage model functionality is most likely what’s most important, and you can probably save yourself on premiums and limit yourself to just liability.

What can my auto insurance company give me?

Next is looking around for the company that’s best for you, and there’s going to be plenty to consider. It can be a lot to juggle, but if you’re armed with a solid idea of what you need and can afford, the following tips should point you in the right direction..

  1. Have a baseline for comparison.

When looking at multiple policies, make sure that they have the same types and amount of coverage so that you can accurately contrast what your money would get you. If you can get the same perks for less at one place, you’ll have an easier time choosing it over another. Also look for secondary benefits beyond the basics — primary liability at the top, of course, followed by medical payment coverage, collision, and so on — such as glass coverage and/or reimbursement on rentals. Perhaps these aren’t important to you; but if they are, or they come included for little or no extra cost, the perks might be enough to decide you.

  1. Pricing

The more quotes you can get from multiple sources, the better since prices can vary a lot for the same basic services. Also, keep an eye on how payments are scheduled: many places will give you a discount if you pay in six- or twelve-month chunks at a time. Finally, consider the price of the deductible, which represents how much you have to pay yourself before your insurance covers anything. The higher your deductible, the lower the premium (the cost of the policy) will be.

Finding your car insurance: A three-step process

The key to finding the right auto insurance for you is keeping it simple: let the numbers give you a starting point, and then build up from there:

  1. Determine your budget and whether you want to shape it around paying every month, or once every several months.
  2. Determine what your biggest priorities as a car owner are. Do you just need something to ensure you’re following state law? Do you need the medical insurance? Are you worried about uninsured drivers?
  3. Determine how much peace of mind you’re willing to trade for the cost. The more you save now, the more it could cost you later. But nothing is set in stone, and nobody plans for an accident, so this is an entirely personal preference.
  4. Compare as many different plans as you can, and ensure that you’re getting as much as you require for your budget.

Once you have a firm grasp of what you need and what you can do without, you can filter through the many different offers and deals out there to find what’s best for you. Don’t be afraid to get some help: auto insurance companies are always more than willing to break down the services that they can give you, the pricing, and what discounts you may be able to score if you work with them. They want your business, after all, so use that to your advantage!

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