The allure of owning a car has not dwindled since it first became the mainstream means of transportation. A personal car creates endless possibilities because it allows you to go anywhere at any time. For most people, car ownership is attractive simply because it is convenient.
While most people see a car as an asset, it is a liability as it costs money to run. After acquiring one, you must contend with the running costs spread between fuel, maintenance, and insurance. The law requires every car on the road to have insurance. Different policies are available, depending on the level of coverage you need and the specific insurer you go for.
Types of Auto Insurance
Car insurance policies typically cover for:
Liability- Essential when you accidentally cause third-party damage. Liability insurance covers property damage or injuries caused by your vehicle; it does not cover damage to the vehicle. It also covers any legal costs should an accident lead to court. It is mandated by law, and a basic cover is enough for compliance.
Collision– This covers any damage to your car, regardless of who caused the fault. It pays for repairs or total replacement if your car is irreparable.
Comprehensive Coverage– This is the most expensive policy and the most reassuring. It covers theft, fire, damage from natural events, falling objects, or animal crashes.
Additional covers available are personal injury protection and uninsured motorist insurance.
The higher the cost of your car, the higher the insurance costs. If your budget restricts you, your first task should be to narrow down the most affordable makes and models to insure. An insurance agent can give you a list of cars at different price points for guidance.
Decide in advance the type of insurance you need. Liability insurance is a must, but the other policies are optional depending on where you live and if you’ve bought your car outright. A car loan or lease will require a comprehensive cover.
A Few Tips
The abundance of car insurance companies gives you the freedom of choice. Shop around for quotes using online comparison tools. Small and large insurance companies‘ huge variance of offerings underscores the importance of looking around.
Do not be quick to settle for the insurance offered by the dealership. While convenient, their offers might not be as compelling as those from other insurance companies.
You will likely pay more if you are a first-time car owner. Insurers hold the presumption that an inexperienced driver is more likely to get involved in road incidents. A few years of driving experience will qualify you for more affordable rates.
Your age, type of car, marital status, credit standing, and level of education are some of the details used to determine the kind of policy you get. Expect higher rates if you are young and unmarried or driving a luxury car.
Inquire for discounts. Competition in the field means some policy givers offer discounts on new cars and defensive driving. Do your research to establish how much insurance you need to avoid being overinsured or underinsured.