Are you a first time car insurance shopper? Don’t fret.
There are 263.6 million vehicles registered in the United States. In 2015 alone, 4,548,000 car crashes involved property damage. This statistic means there is a 3 percent chance you’ll get in an accident.
In short, you need insurance for your car.
Why is it necessary for you to have the right coverage? Having the proper coverage saves you from such penalties as:
- Traffic tickets
- Suspension of your driver’s license
- An increase in your insurance premium
That’s not all. You still have to worry about meeting the minimum insurance coverage required by your state.
Let’s explore things you should know before getting your first car insurance cover. Read on.
First Time Car Insurance Shopper’s Guide
As a first time car insurance shopper, the first thing to worry about are the types of insurance coverage. You’d quickly get an idea of what options you have.
Know the Five Basic Insurance Coverages
There are five basic types of insurance that you can pick from as a vehicle owner. Here is the breakdown.
This type of insurance is further broken down into two. These are;
- Bodily injury liability coverage
- Personal property damage liability coverage
This is the first you’ll come across as a first time car insurance shopper. You’ll be required to get this coverage when you register your vehicle and get a driver’s license.
The purpose of a liability coverage is simple. It helps you pay for injured parties’ medical expense when you are at fault. It also covers property damage.
Please note that ownership of this coverage is compulsory in all the states in the United States, except New Hampshire.
As the name implies, this insurance pays for collision. If you hit a fixed object like a street lamp or a wall, this insurance covers you. Collision coverage also includes covers expenses to repair your car if you were in a car crash.
Comprehensive coverage pays for damages that are not related to a motor accident. These include;
- Animal Collision.
Comprehensive coverage also helps pay for your car if it’s stolen. Depending on where you live or what you’d rather be covering, getting a car insurance for vandalism, hail, animal collision, theft, and fire can save you from painful experiences.
Uninsured/ Underinsured Motorist Coverage
This insurance pays for damages when you an are involved in an accident. Unlike the other types of insurance, accidents covered by Underinsured Motorist Coverage must result from an uninsured or underinsured driver. Only then can you claim damages.
Personal Injury Protection
Some states require all drivers to carry a minimum personal injury protection. This insurance covers any other accident-related costs. It includes rehabilitation expense.
The Customized Coverages
Apart from the coverages outlined above, some insurance companies offer customized coverages. Of course, it’s optional. Example of such coverage are:
New Car Pledge
Farmers Insurance provides this insurance coverage. A New Car Pledge coverage provides you with a brand-new vehicle if your car is totaled;
- During the first two years of use
- Within 24,000 miles of owning it
So you could get a new car if yours is under two years or has covered less than 24,000 miles. You can qualify for a new vehicle by age or distance covered.
This insurance coverage allows you to get traffic tickets without an increase in rate. It covers towing and roadside assistance too.
How Much Will Car Insurance Cost You
Several factors determine how much you’ll have to pay for coverage. One of the most important factors used is your driving record. Drivers with clean record tend to pay a lower rate than drivers with accidents.
Since you are a first time car insurance shopper without driving experience, how will they charge you?
There are some other factors they take into account such as, where you live. If you stay in a high-crime neighborhood, you may have to pay more. Your insurance cost increases too if you drive in accident-prone areas.
Other factors that determine the cost of your car insurance include;
- Your age and gender
- Where you park your car
- The type of car you drive
- How many miles per year you drive
- Your credit history
Now that you know the factors that’ll determine how much you have to pay as a first time car insurance shopper, the next question is obvious. How do you lower the cost?
How to Lower Your Car Insurance Cost
According to Insurance Information Institute, the average cost of car insurance is $800. However, there are ways to lower your premium. Consult your insurance agent for the breakdown of special discounts the company offers. For example, some companies’ lower insurance cost for being a good driver or being a soldier.
Other steps that can help lower your car insurance cost are outlined below.
Get a Clean Driving Record
As said earlier, this is the most significant determinant of how much you’ll pay. As such, it only makes sense to try to get a clean record. That’ll happen if you drive safely. The longer you maintain that clean record, the lower you’ll have to pay.
Take a Defensive Driving Course
Take a formal course to prove that you are a safe driver. It doesn’t matter if you do it online or in person, it saves you money. It also has the added advantage of keeping you safer.
Qualify for a Discount
As a first time car insurance shopper, you can qualify for a discount. However, you’ll be required to meet specific requirements. For example,
- If your vehicle is new
- If you live with your parents and they have a family insurance cover
- If your new car uses a policy covering multiple vehicles
Would you rather qualify for a discount? Get a new car, or see whether your family insurance covers your car, or find out if your policy cover involves multiple vehicles.
Earn a Loyalty Discount
There are insurance companies that offer discounts for being a loyal customer. It doesn’t matter if you are a first time car insurance shopper, pick a company you know you can stay. That way, you’ll earn a lower car insurance cost over time.
The cheapest car insurance available to teenage drivers in 2016 was $2,411 per year. As a first time car insurance shopper, it is imperative that you reduce your premium. Use any of the options outlined above. Better yet, contact your insurance agent. He or she should help you make an informed decision.
Before Buying Your Car Insurance
You already know your options if you are a first time car insurance shopper. That’s either shopping online or in person. However, there are other methods you haven’t considered yet. An example of such approach is the use of an agent or broker.
Car Insurance Agent or Broker?
Brokers are independent agents that work with many insurance companies. Car insurance agents, on the other hand, work with specific companies.
The lack of loyalty towards any company make insurance brokers less bias. As such, they tend to give a complete picture of what your options are. The downside is that you’ll have to pay a broker fee.
However, if you are interested in a specific insurance company, an agent would be a better option. Agents have detailed information about the companies they work with. They’ll clue you in on the available discounts and how to get them.
Researching Car Insurance Companies
It doesn’t matter if you use the service of an insurance agent or hire a broker, research is essential. Before applying for quotes or choosing a provider, you have to research car insurance companies. It makes it easier to make a decision, especially for a first time car insurance shopper.
These are things to look out for when researching insurance companies.
- Check consumers’ complaint ratio at the state’s department of insurance
- Find out the financial standings of the provider
- Check the insurance company’s rating on Better Business Bureau.
- Use the provider’s social media account as a platform to ask questions.
- Discuss your options with family and friends.
You want to know the consumers’ complaint ratio, BBB rating, and discuss your options with other people before you decide. Some companies may help you with finding out the financial standing of the provider.
When Buying your car Insurance
By now you should have researched the State requirement for getting insurance. Your research should have also helped you pick which company you intend to use. What’s the next step?
Get Rate Quote
Request for multiple quotes for the same amount of coverage. The decision of picking the best plan for your budget becomes easy after that.
Use an Insurance Agent
If you are using an agent, get information about additional coverages and possible discounts. It’ll help you save more money in the long run.
Select a Plan
Choose a plan that suits you. The combination of your research work and your agent’s knowledge should make this decision easy for you.
Review the Paperwork
The paperwork you’ll be reviewing include the summary of your insurance coverage and your insurance cards. Be thorough when going through everything and contact your agent for questions.
Keep Your Proof of Insurance
Your insurance card should always be in your glove compartment. It’s a way of protecting yourself if you get pulled over for a traffic violation, or get involved in an accident.
Wrapping Things Up
Knowing your states’ requirement goes a long way in your decision-making process. For example, New Jersey has the most expensive car insurance in the United States. Doing the right research and having the right agent will help you get the best coverage possible.