Is there anything more exciting than owning your first car? Sure, you had a beater that your parents bought and insured for you, but this is different. This is your first grown-up car and it’s beautiful. But you know keeping it beautiful is your responsibility, so you do the responsible thing and start looking into car insurance. Smart move. Here are some tips to help you find the most appropriate and affordable car insurance.
Know Your State Requirements. The very first thing to do when hunting for car insurance is to check on what is required by the state and work from there. You can find a guide to state requirements here. However, it’s important to keep in mind that the minimum requirements for bodily injury liability are generally lower than what you’ll actually need, depending on what kind of car you have and your personal financial situation.
Know Your Insurance. Besides the basic state requirements for insurance, there are two common types of car insurance that you should know about: Comprehensive and Collision. Comprehensive covers uncontrollable things that happen to your car. For example, if you park under a tree and a branch falls off and dents your roof or your car is stolen. Collision insurance covers you in an actual accident or if you’ve hit something other than a car, like a fire hydrant. The amount of each type of insurance you’ll need depends on how expensive your car is.
Know Your Car. The worst happens. You get into an accident and your brand new car is badly damaged. When it comes to purchasing insurance on a new vehicle, more is more. According to the Insurance Research Council, 16.1 percent of motorists are uninsured. So, it could come down to just your insurance helping to cover an accident and if you have an expensive car, protecting it with higher insurance amounts is probably worth it.
Know Your Finances. Also keep in mind that sometimes the consequences for an accident you caused can go beyond cars. If an accident is your fault and the costs for covering the other drivers car and medical treatments are more than your insurance you could be liable for the difference in cost. In other words, if your insurance doesn’t cover it, you could be sued for other assets you have. For someone who doesn’t have a lot of assets, it’s probably fine to buy less car insurance, but if you have more to lose, you should buy more insurance in order to protect one accident from impacting your net worth.
Know Yourself. Before buying a full insurance package, be sure you know what insurance or services you already have that may cross-over with the insurance you are about to buy. For example, if you are an AAA member, then you may not need your insurance to cover road-side care. Or you may not need as much personal injury protection because you already have a lot of health insurance. We recommend doing a thorough check of what services you really need before making any purchases.