Far from being a one-size-fits-all situation, car insurance coverage must be tailored to your specific circumstances.
Overlooking this reality could cost you in a number of different ways. You’ll pay larger premiums than you should if you over insure. Or, you’ll find yourself facing some rather significant financial obligations in the event of an incident for which you are under insured.
Reviewing these questions to answer before buying car insurance will help you make sure you have the exact protection you need.
What Kind of Car Do You Have?
Sports cars cost more to insure than economy cars. While at first glance you might think it’s because they tend to be driven faster, that’s just part of the reason. They also cost more to repair if something happens — and they’re more likely to be stolen. Now, with that said, yes, the slower your car the better — as long as it isn’t one that also gets stolen a lot.
Do You Drive a Lot?
This question is typically posed in terms of the number of miles you drive back and forth to work each day. Your potential exposure to incidents is greater if you have a long commute to work. Insurance companies — forever trying to minimize their risk — require you to pay more if you drive more.
However, before you think you can buy a car, underestimate your annual mileage and get a better deal, be aware the odometer reading will be recorded when you get the policy and again in the event of an incident. Your claim could be denied if it reflects a trend toward higher than estimated mileage.
Do You Use Your Car for Business?
You must carry a commercial insurance policy if you’re using your car for business. This has become even more of a factor with the rise of ride sharing services. It also holds just as true if you have a part-time job delivering pizzas, newspapers or anything else for which you’re paid.
What’s Your ZIP Code?
Simply put, where you live has a decided effect on the cost of your auto insurance. Some policies require the cars they cover to be stored in a locked garage every night when you live in certain areas. If your region is known for a lot of insurance claims, you can expect insurers to demand a higher rate to provide coverage for your vehicle. What’s more, you’re going to want to be sure you have coverage against theft and vandalism if you live in such an area.
Who Will be Driving the Car?
Statistically speaking, young males drive more aggressively than young females. Meanwhile, older, married adults are regarded as being the most cautious. And yes, these factors do figure into the amount you’ll pay for coverage. Now before you cry ageism, sexism or any other ism, keep in mind this is all based upon statistical analysis.
Is Your Car Leased?
Leasing companies, like insurance companies, are anxious to minimize their exposure to financial risk. As a result, they require customers to carry full coverage at the highest allowable limits of liability. This will increase the amount you’ll pay for insurance.
What Does Your State Require?
Every state aside from New Hampshire and Virginia mandates the carrying of a formal auto insurance policy. However, residents in both of those states are still held financially responsible for incidents they cause. Additionally, Virginia residents must pay the state $500 a year to motor insurance free. Other states do allow drivers to self-insure by posting a bond, which varies from state to state.
Automobile accidents can be extremely costly, particularly if a loss of life results. Reviewing these questions to answer before buying car insurance will help you make the best possible decisions to protect your personal assets.0