The general consensus when buying an automobile is that you will also need insurance for it. Liability insurance is mandatory, though the particular limits depend on which state you live. For example, liability auto insurance in North Carolina requires that you carry a minimum of $30,000 for personal injury to a person, $60,000 for total personal injury expenses for several people, and $25,000 for property damage.
But you will also most likely need comprehensive cover to pay for damages to your own car. Other types of coverage exist, but they will cost you more.
So what should you look for when you try to find the right auto insurance policy for you? Here are some factors that you should consider:
This is the most important factor of all. First of all, your liability coverage must comply with the law, but you may wish to opt for wider coverage limits and additional coverage options.
Optional coverage includes:
- Collision. This pays for damage to your car if you’re involved in a car accident.
- Comprehensive. This includes payment even for damages that aren’t caused by car accidents, such as theft.
- Medical payments. This covers the expenses involved with the injuries you and your car companions sustain.
- Uninsured motorist bodily injury. This covers the cost of your injuries if the other driver who was at fault is under- or uninsured.
- Uninsured motorist property damage. This time it covers the damage to your vehicle caused by the uninsured driver.
- Rental reimbursement. This pays for your rental expenses while your car is in the shop.
- Roadside assistance. This pays for services like towing.
Basically, you need to consider the likelihood of needing the various coverage options available. You may not need rental reimbursement, for example, if you have a second car you can use.
As any responsible consumer, you need to consider the price of the policy. First you need to determine the deductible, which is the amount you pay out of pocket before the policy kicks in. If you have a comprehensive coverage policy with a deductible of $1,000 this means that you’ll have to cover the repairs up to this amount before your insurance starts paying expenses.
On the other hand, if you opt for a lower deductible then it’s more likely that your monthly premiums will increase. So you need to figure out how much deductible and premiums you can afford.
Finally, it’s possible that 2 similar plans may not cost the same. One insurer may charge higher premiums for the same coverage and deductible from another insurer. Insurers may also offer some types of discounts that you can use, such as discounts for military veterans or if you attend and pass a certain safety driving course.
Quality of the Insurer
One of the reasons why people like to get testimonials from friends and family about insurance companies is that insurers are not all alike. Some, for example, may be very forthcoming about setting claims. They’re more likely to approve a claim and they’re prompt about payments. On the other hand, some insurers have earned a negative reputation for denying claims and late payments.
Doing research in this can be difficult, though you can check various car and insurance forums as well as websites like Consumer Reports. However, your friends and family can give you a very accurate idea of how their insurance company deals with claims.
Picking the right insurance policy from the right insurer isn’t always a clear-cut. But it has to be done. Driving around without insurance can get you in legal and financial trouble, and insurance can be just as important as your seatbelt in saving your life!