MoneyMagpie

Feb 28

5 Tips for First Time Car Insurance Buyers

Reading Time: 3 mins

If you’re under 25, there’s no getting around the fact that you’re going to pay more for your insurance. You’re in the age group with the largest percentage of accidents. If you’re looking for car insurance for the first time, finding the right coverage seems an overwhelming task.

Or, maybe you want to shop for a different auto policy that better fits your needs. Maybe you have a shaky driving record or experienced lapses in insurance that make it difficult to get car insurance now. 

Whatever the case, finding the right car insurance means more than just getting legal so you can hit the highway. Insurance protects you from yourself as well as other drivers. 

How do you go about finding the right insurance? Follow these five tips.

  1. Figure Out What Type of Coverage You Really Need

Insurance companies specialize in a wide variety of car insurance coverage, such as full-spectrum protection, liability, collision, comprehensive and uninsured motorist. What does it all mean?

  • Liability insurance: Most states require that you carry a specific minimum amount of liability insurance. Liability covers the damage and medical bills of others if you cause an accident. Note that the minimum liability coverage requirements pay up to a specific amount. You are responsible for any overages. In many cases, you’re better protected if you buy more than the required minimum. 
  • Collision insurance: Collision insurance covers damages to your vehicle in the event of a collision with another vehicle. 
  • Comprehensive coverage: Comprehensive coverage is typically required if you still owe a finance company for your car. Comprehensive covers damages incurred from any event involving the loss of or damage to your vehicle, including theft, vandalism or animal collisions. 
  • Additional services: Rental reimbursement and roadside assistance are often available as an auto insurance add-on.

 

  1. Determine How Much Insurance to Get

Clearly, you need at least the state-required liability coverage. But should you buy more?

The minimum state requirement may not be enough to cover rising costs. What’s more, if you own a house or have substantial savings, you could lose both if you cause an accident. You are responsible for all damages if you cause an accident. Consider purchasing more than the required minimum. 

If you still owe money on your car, get comprehensive and collision insurance. Comprehensive ensures that your lender gets paid no matter how your car is damaged or lost. Comprehensive insurance also fits the bill if you don’t owe on your car, but your vehicle is irreplaceable.

 

  1. Shop Around for the Best Fit and Price

Not all car insurance companies cost the same or cover the same. How can you find the right fit? It isn’t easy. Some companies, like Freeway Insurance, take the guesswork out of the picture by doing the comparison shopping for you. 

Whether you go with a broker or do the work yourself, remember that price isn’t everything. Sure, you can legally drive with only the state insurance minimum requirements. But, choosing solely on price leaves you open for all kinds of potential financial pitfalls. 

Take into account your unique circumstances. Are you under 25? Look for coverage designed for you. Have you had accidents or other difficulties in the past? Shop around for the best coverage at the best price. 

Don’t get caught up with a company that promises great prices before looking into its background. Verify that the insurer has a current insurance license in your state, exhibits prompt, high-quality customer service, and the company financials are easily accessible and appear sound.

 

  1. Learn How to Save

Most companies offer discounts if you meet certain criteria. Many car insurance companies offer good student discounts. You can also save if your vehicle has airbags, anti-lock brakes, and anti-theft devices. 

Another way to save is if you pay your premium in full instead of paying monthly payments. Choose paperless billing to cut costs. A positive credit history and good credit rating keep your rates lower. If your credit score is low, work on improving it. 

If you own a home, require renters insurance, or insure multiple vehicles, bundling your coverage with the same company often results in lower rates. You also pay less when you choose a higher deductible, but make sure you have the deductible amount in savings in case you need it.

 

  1. Take Your Time

Learn about the different coverages and decide what you need before shopping around for car insurance. Don’t commit yourself to the first agent you speak with. Keep track of the companies you contact, record each agent’s name, and write down details of each plan. 

Take the time to go over what you learned, examine policy and coverage details, and choose the car insurance that’s right for you.  

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