What every American needs to know about car insurance

It is safe to assume that everyone understands the importance of buying auto insurance. Apart from the fact that it is demanded by the law, for good reason too, it does make things easier in the event the car gets damaged or stolen. Over the years it has become mostly a commoditized product without much variation between insurers, however, there are little bits of differences here and there as far as insurance agreements are concerned, all vehicle owners should be in the know.           

1. Estimated Limits Are Low

Certain estimates will give you estimates of low liability limits so that the payables at the end of the day if it comes to that are cheap. Irrespective of how low the premium is, ensure that you have 100/300 liability limit. The 100k liability limit is in the event that you unintentionally dent someone’s car in the event of an accident. While the 300k liimit is the total amount payable for one accident.               

2. Your policy may have different deductibles for different types of claims

Auto insurance policy deductible comes in various categories. There’s no one size fits all policy here. For example, the agreement for theft coverage will be different from that of comprehension protection and so on. Sometimes the amount payable on these different agreements are the same, and at other times, they can vary. 

From out experience, deductible is in the range of 500 dollars is advisable irrespective of the category of coverage. However, this is not always feasible, especially for unpopular vehicles. For example, Teslas might be said to attract rather exhorbitant protection agreements. In order to make sure the premiums don’t dig a hole in your bank account, 1000 dollars or more worth of deductibles is usually recommended. 

3. At a certain point, comprehensive vehicle insurance is no longer worth it

It may seem to many that comprehensive car insurance should be the coverage of choice every time, but sometimes it’s not always the right choice. The idea behind total auto protection is to help insure your vehicle against whatever untoward that could occur.

With comprehensive, minor issues such as windshield chipped by a rock or your doors dented in a parking lot will be covered. The deductible will not reduce however, you’ll still be required to pay 500 dollars or around that range.  

If your vehicle is not that expensive, say it’s worth less than 4k dollars, it means you’d be paying over ten percent of the valid of your vehicle. Therefore, you actually won’t be able to make claims for mishaps lesser than road accidents. This means that any agreement which involves mishaps less than road accidents will be a poor economic decision. 

4. Always get roadside assistance and policy for cars you rent

A good number of insurers include vehicles their customers’s rent and also roadside help into their agreements. It’s actually a wise thing to do, these agreements can save you a lot of stress and money also. 

A lot of times, these extras don’t even cost that much, it’s just a little more than a couple of dollars a month. This decision can save you many headaches should you ever actually find yourself in a mishap or should your car break down in an inconvenient place.

Many companies now limit roadside assistance to only newer vehicles; this means that you should check with your insurers to know their offerings as regards this.  Older cars are more susceptible to breakdowns; therefore if you car falls in this category, get this agreement. Ndwer automobiles are not spared either, flat tires, dead batteries; keys locked inside the car can happen when we’re not expecting it. 

All of these instances would be covered under traditional roadside assistance coverage. One thing you should certainly check before actually committing to the policy is to see whether your newer car already includes roadside assistance from the dealer or manufacturer, as some do come with that benefit.

5. Individual Policies Can Offer Protections for Rented Cars

Some of these firms who offer car rental services, also like to sell insurance for the vehicles that they rent out, however, these policies are usually very expensive.  Prior to your buying protection from them, find out what your insurers already offer. 

When you buy car insurance, it is quite normal for the coverage to also be valid for whatever vehicle that you rent. 

6. You can (and usually will be) fined if you get your coverage lapses

Every state has a law requiring vehicle owners to have liability insurance when they register their car. It used to be that the only time the state checked this was either when you were being stopped by roadside police, or when you were renewing your vehicle registration.

Nowadays, states have become more sophisticated and know immediately when your coverage lapses.

You’ll be notified, and if you fail to provide evidence of insurance period they claim your coverage lapsed, you will be fined for that lapse, even if your vehicle was sitting at the house.

7. You should shop your policy around every year

Insurance firms will advertise and quote you low rates to bring you in, but it isn’t uncommon for them to slowly raise your rates over time. Companies know that once you are their customer, there is a certain degree of friction in switching providers, even if today’s technology allows you to switch insurers in less than an hour.

To ensure you are getting the best possible rates, make sure you get at least one competing quote once a year.

Some of these items may seem like common sense, while others may seem counter-intuitive, but all of them go to show you that being educated about your insurance products can truly save you dollars in your personal finances.

If your personal insurance situation is more complicated and you have other products bundled with your auto policy, then you should consult with your insurance agent or broker regularly to ensure you are aware of your current coverage, that they are aware of any changes with your current car or property situation, and that they are working to get you the best price on all your coverage.

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