When looking into car insurance plans, the variety of options, prices, and coverage may cause confusion. The overwhelming amount of information can cause car owners to not fully understand the coverage that works best for their car, causing them to either be too covered or undercovered.
As you go through the car insurance process, you’ll need to ask a few questions to yourself and a representative to get the full picture. We’ll go over five of those questions in this article to help you better understand exactly what coverage you need and what you are able to afford.
What type of driver are you?
There are car insurance plans that cater to all types of drivers. When purchasing your plan, you need to ask yourself what you’ll be using your car for primarily. Do you use it for long road trips? To commute to work daily? Casually? Or, is it a car that needs a special type of coverage, such as an antique car?
Whatever your circumstances are, you’ll need to ask an insurance representative which type of coverage is best for you. For example, people who tend to drive on the safer side prefer a plan from Nationwide car insurance, as they offer benefits for those who drive safely.
How much can you afford?
Depending on your car and circumstances, your auto insurance premiums can increase or decrease. Typically, the nicer car you have, the more your premiums will be. Or, if you have a past accident on record, your premiums can increase as well. Other factors for price increases may include the type of coverage you choose, your location, the number of drivers on your policy, and more.
Make sure you can afford the coverage you choose before purchasing a plan. But, don’t cheap out on insurance either just to save a few dollars every month, as an accident can end up costing you more in the long run.
What type of coverage do you need and who is covered?
There are different types of coverage for auto insurance plans. The main types include:
- Auto liability coverage
- Collision coverage
- Uninsured and underinsured motorist coverage
- Personal injury protection
- Medical payments
- Comprehensive coverage
You can learn more about the specifics of each coverage by researching the basics of auto insurance. Based on where you live, some types of coverage may be required — or not. There are also different minimum coverage amounts required in every state. As you get ready to purchase an auto insurance plan, make sure you have all the coverage you need for your car and driving habits.
Are there any possible discounts?
Many auto insurance companies offer a variety of discounts for their policyholders. Some discounts may include student discounts, safe driver discounts, military discounts, bundled discounts, low mileage discounts, training discounts, auto-pay discounts, and more. Simply ask a representative what discounts may be available.
What is your risk assessment?
You should understand what your risk assessment is before purchasing an auto insurance policy. Risk assessment is the way policymakers determine how much of a risk you and/or your car holds as a policyholder. This is based on demographics, driving records, the car itself, and more. Your risk assessment will help the insurance company determine how much to charge you every month.
Once you determine the answers to these five questions, you’ll be able to understand what auto insurance policy you’re purchasing much better. The more you know about auto insurance plans, the easier it will be to make claims, changes, and payments in the event of an accident.