Getting a car means getting car insurance. While the most exciting part of the car-buying journey is test-driving and finding the perfect vehicle for you, you should never forget about insurance.
Your insurance policy protects you in the event of an accident to ensure you won't have to pay too much out of pocket, which can help you avoid putting your finances at risk.
If you've never purchased car insurance before or you're looking for a way to get better car insurance, you've come to the right place. Here is the ultimate guide for getting the best car insurance.
Understand What's Considered
You can shop around and get quotes from any auto insurance company in your state, but it's best to know what factors insurers consider to give you that quote.
Many people are shocked at their insurance premiums because they don't understand why insurers see them as risky.
As a lender, insurance companies must evaluate different factors to give you the best price, but they also determine how much risk it is to ensure you.
Here are the factors that insurance companies consider when giving you a quote.
Your driver profile consists of your:
Age: The younger you are, the higher your insurance because you're inexperienced. Sixteen-year-olds who get their license are added to their parent's insurance policy, which increases exponentially.
Driving experience: Even if you're in your twenties when you get your license, you still have minimal experience behind the wheel, which means you might be more prone to accidents.
Driver history: If you have an account of accidents and violations, the insurance company will view you as a higher risk, making your premium more costly.
The more expensive your car, the more expensive it will be to insure. In general, expensive cars cost more to repair and replace, so if a high-end vehicle is in an accident, it will cost the insurance company more to fix it than an older vehicle.
High-performance vehicles also increase your insurance premium since more risk is associated with owning a fast car.
Many insurers also calculate premiums based on credit scores because they can predict risk. If you have a low credit score, you're considered higher risk because you haven't paid your bills on time. However, many states restrict or prohibit these types of insurance scores, including:
Other factors can also increase rates, including traffic conditions and crime in your area. For example, the higher the crime rate, the more likely your car will get stolen.
Related: 7 Steps to Buy a Car Painlessly
Additionally, if you have bad weather in your area, resulting in more accidents, your insurance company may increase your premium.
The best advice we can give you regarding getting the best car insurance is to shop around for the best price, even if you already have car insurance.
You should shop around every year because car insurance premiums increase yearly.
In addition, insurers don't always reward customers who stick with them. Instead, you can save more money by looking at the competition to see what they're covering for the same price.
Some even offer discounts for being a student and having a certain grade point average.
Switching insurers doesn't mean you'll necessarily have better or worse coverage, but you can find a similar range at a better price, depending on the factors we discussed.
It would be best never to choose an insurer when shopping around because they're cheap. Before you agree to anything, understand everything covered in your policy and research the insurance provider to ensure they are trustworthy.
If you're working with one of the top insurance companies, you probably already know friends and family who use them and can ask around.
However, if you've found a smaller insurance agency, search for them online to find reviews from current customers to learn whether they're fair and trustworthy.
Consider Life Changes
When you're young, you might only use your car to get to work and go on vacations or road trips. However, when you're older, your car will be a necessity for your family; you'll drive your children to school and activities, take yourself to work, use it to pick up groceries, run errands, and when your children get older, they'll learn how to drive in your car.
Your life changes will impact your premium. For example, your premium will change if you get married or add a teenager to your policy.
Always ask your current insurer how much these changes will cost you and see how you can find savings. You can also shop for other policies to get the best rate.
Don't Forget Liability Coverage
You should have the minimum coverage required by your state, but you should also go beyond these minimums to protect yourself from liability.
Liability insurance covers injury and property damage caused to someone else during a crash.
If you don't have liability insurance, you may have to pay for someone else's hospital fees out of pocket if the accident is your fault.
Depending on where you live and how you use your vehicle, you might not need all the different car insurance coverage types. For example, if you have an older vehicle that will cost more to repair than to replace, you might not need collision insurance. Other areas where you can save are:
Raising deductibles: If you submit your deductibles on your different types of coverage, you can lower your premium because you'll pay more out of pocket if you're involved in an accident.
Forget extra coverage on old vehicles: Old cars don't need additional coverage so you can drop comprehensive or collision coverage. Only aim to do this when your premium exceeds ten percent of your car's value to help you avoid unnecessary out-of-pocket costs later.
Consider personal injury protection & medical payments coverage: If you already have good health insurance, you don't need extra coverage through your car insurance. If you're in an accident and end up in the hospital or need medical care, your health insurance should cover most, if not all, of your costs.
Saving Money on Car Insurance
In addition, finding the best car insurance depends on your ability to shop around; no insurance provider is like another, and costs will vary.