Purchasing auto insurance is quite a hassle, and it might be a stressful experience if you’re a first-time auto owner.
When it comes to auto insurance, it’s easy to believe that the lowest price offers the best value. And because insurance is one such thing that is rarely used, many people often look for ingenious ways to save as much money as possible.
However, in search of an insurance policy that offers maximum coverage at a fraction of the price, most auto owners end up buying the wrong plan. Ultimately, it costs them more in the long run than it would have if they bought the right policy from the get-go.
Bottom line: finding the right insurance coverage is as important as finding the right car or truck.
That said, we’ve put together a list of a few factors that you must consider when buying auto insurance. Let’s get straight to the deets, then!
5 Things to Consider When Buying an Auto Insurance
Here are five things that you must consider when buying or renewing your auto insurance:
1. Figure Out Your Requirements
The first thing you should do before deciding on an auto insurance plan is to figure out your requirements. In this regard, assessing possible risks will help you understand the type of coverage you need.
Say you live in a neighborhood where vehicle theft is common. In that case, you’ll have to go for an insurance policy that offers coverage against theft. Likewise, you need to consider whether your daily travel route is prone to accidents.
In this regard, a comprehensive coverage insurance policy will be a sensible choice.
2. Your Driving Record and History
Believe it or not, your driving record and history influence the cost of the auto insurance premium. That’s because of the hazards associated with drivers involved in several traffic accidents.
Driving records and history mostly matters when you’re purchasing truck insurance more than any other type of auto insurance because of the disrespectful driving habits of truck drivers.
In regard to insurance premiums, Western Truck Insurance Services states that individuals with a bad driving history can also qualify for coverage. However, keep in mind that they may end up paying a higher premium.
If you’re among those with a bad driving record, taking a defensive driving course and obeying posted speed limits and traffic laws will help you improve your driving record. Not only will these measures prevent accidents, but you’ll also not receive speeding tickets.
3. Your Credit Score
One of the common mistakes auto owners make while purchasing an insurance policy is ignoring their credit history. Any errors in the credit report are likely to affect their insurance costs.
Many people do not know that insurance companies determine premium costs using mathematical models. Bear in mind that your credit score is just one component of that model.
These companies calculate the insurance score to determine your likelihood of filing a claim rather than measuring your creditworthiness. Numerous studies suggest that the credit rating of an individual is a good predictor of submitting claims in the future.
Always inquire with potential insurers about whether they consider the credit score of individuals when calculating their insurance premium cost.
4. Fast Claim Process
Low-priced policies aren’t enough when it comes to buying auto insurance. Your insurance company must hold a solid reputation for fast or stress-free claims.
Therefore, always take a look at the claim process prior to purchasing an insurance policy. Let’s be honest. Wouldn’t your affordable policy be useless if you’re unable to raise a claim at the right time? Of course, it would be.
In our opinion, insurers offering a fast claim process must be preferred to those that take forever to settle claims. Hence, make sure you compare the claim process before joining hands with an insurance company.
5. Collision Coverage
Often, auto owners drop collision insurance because it makes their policy less expensive. In case you’re thinking of doing the same, bear in mind that the insurance company won’t reimburse you for damages to your vehicle.
Two scenarios where dropping collision insurance makes sense are:
- Your vehicle is too old
- You prefer replacing your vehicle if it gets involved in accidents
However, auto owners who are planning to buy insurance policies for new vehicles shouldn’t remove the collision coverage from their policy, as it will prove beneficial in the long run. While you will have to pay for the coverage, you can rest assured that the insurer will compensate you in case your car gets damaged in an accident.
Buying Auto Insurance: The Bottom Line
To recapitulate, buying auto insurance isn’t a piece of cake. Just like purchasing a car, a lot of thought and research goes into it. Only then will you be able to make a sound decision.
When searching for insurance companies, make sure to take quotes from multiple insurers and weigh them down against the insurance coverage. Then, shortlist those offering maximum coverage at a minimum price and check reviews on third-party sites before sealing the deal with an insurer.