Whether you’re the proud owner of a new luxury vehicle or you’re hanging on to your existing car for a little bit longer, insurance is essential.
If you’re new to insurance or have just purchased your first car, there’s a good chance you’re a little confused about insurance and what the process of getting your car insured entails.
Here are some tips to help you find the right type of insurance, one that isn’t too much stretching your budget, but also enough insurance to cover and protect you.
Understand the Different Types of Coverage
First determine the types of cover you need or the level of cover you’re looking to pay for. It is also important to consider what other benefits you want to pay for. You can opt to get a free rental if your car needs to be fixed and if fixing a small crack in your windshield is covered.
Take the time to compare the policies from the different car companies. Some may be more expensive but offer more value. The key is to avoid paying for unnecessary insurance but ensuring you are covered for the most important damages, liabilities, and medical bills.
Know What is Covered
For those new to the vehicle insurance game, there are often two ways your insurer will cover the cost of your vehicle: agreed value or market value.
The agreed value is the value set by your insurer and the amount that will be paid out in full if your car is written off entirely. This may be a better choice for some, especially if you have an auto loan that you need to pay off.
Market value pays you what the car is worth at the time of loss. Often, the car depreciates more that what you owe on the car. So getting market value may mean you have to pay the difference between the loan and the actual amount you get for the car.
Research the average depreciation of your vehicle, the interest rate and length of your loan, and the the cost between paying for coverage that pays either the agreed value or the market value.
Be Smart About Potential Discounts
Many insurance companies offer premium discounts. You can get discounts for taking annual driving safety courses, certain security features on your car, and also your driving record.
Ask the different companies what discounts they offer and what you qualify for. If you have children who drive your vehicle at a specific age, or who are relatively young, you’re going to find that your premiums go up given that there is a higher chance of an accident. If you agree to restrict these drivers and disallow them to drive your vehicle, you will be able to rely on reduced green slip (third party) insurance premiums.
One final way to think smart about your insurance premiums is to ask for loyalty discounts or reward discounts. Most insurers won’t advertise or disclose that these discounts are on offer, and this means that you’re going to need to ask for these specifically, and so make sure to float the idea of a long-term customer discount.
Choose Your Deductible
When your car needs to be fixed, you will have to pay a deductible. The higher the deductible, the lower the premium you pay. Compare the different prices by adjusting the deductible and see what gives you the best value.