From soaring down the highway to picking up the kids from school, a lot of us tend to drive more than walk. And if you've just picked up a brand new set of wheels, you may have already considered taking out a car insurance policy to safeguard your vehicle in the case of an accident. But with regulations and minimum insurance requirements differing in each state, it can be hard to know what kind of cover you'll need.
Choosing the right car insurance policy can depend on more than just what your state requires. Things like where you live and how often you drive your vehicle are also important factors to consider when shopping around. So before you can hit the streets with your new ride, you'll need to know the answer to these four questions:
What is the minimum level of cover I need?
You might already know that majority of states have their own minimum insurance requirements, so you'll need to check what amount applies to you. Bodily Injury Liability, Property Damage Liability, Personal Injury Protection and Uninsured/Underinsured Motorist Protection are included under the minimum requirement. These insurances cover the damage or injury only caused to the other driver if you are at fault in an accident.
However like most basic insurance policies, there are limits to the amount of cover you'll receive. For example, the minimum car insurance requirement in Ohio is 25/50/25, that's $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident and $25,000 property damage liability per accident. So if you think the minimum amount in your state isn't enough, you might want to consider purchasing additional cover, which brings us to our next question.
Should I consider extra cover for my vehicle?
Comprehensive, collision, GAP insurance - drivers have their pick of the lot when it comes to extra coverage. Although these might not be compulsory, they can provide cover for events that don't involve an accident. For example if you live in an area that's prone to natural disasters or has a high rate of theft, comprehensive car insurance can help cover the cost of any loss or damage. Many comprehensive policies also come with optional roadside assistance, which can come in handy if you enjoy taking long road trips.
But before signing up to any insurance policy, it's important to read through the terms and conditions to ensure you understand all exclusions as well as factors that will void your car insurance claim. Knowing this can help you avoid a sticky situation down the track where your car insurance claim is rejected, leaving you to foot the bill for the damage.
How much of a deductible am I comfortable paying?
While we hope you never get into an accident, choosing your deductible amount is all apart of the car insurance process. Put simply, a deductible is the amount you pay when you make a claim, and is put toward the total cost of a claim. In the world of car insurance, a higher deductible means a lower premium.
Depending on your insurer, standard deductibles can range from $250 to upwards of $1,000, so it's important to find the balance between choosing an amount that's appropriate for your budget while keeping your premium low.
Am I eligible for any discounts?
One of the easiest ways to save on your car insurance premium is to scope out any discounts you may be eligible for. Every insurer will have their own set of discounts, which can start from 5% and reach up to 75% off your annual premium. Discounts range from from being a good driver to owning a home and even serving in the military, so you're bound to find one that's applicable to you!
But scoring a sweet discount on your insurance policy is not the only way you can drive down the cost of your premium. If you're prepared to put up a good fight, why not try haggling on your car insurance? Do your research by obtaining at least 3 quotes from other car insurers before approaching your own. While it might entail some shopping around, if your insurer is prepared to match the price, you could wind up shaving hundreds of dollars off your premium!
Ceyda Erem is a content writer for financial comparison site mozo.com.au.
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