June 26, 2022

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6 Things You Should Know About Vehicle Insurance

When buying a new car, auto insurance is one of the things you need to think about. The best type of car insurance to take may depend on several factors, including the type of vehicle you buy, how you use it, and how frequently you use it. It may also depend on your credit score, the market value of your car, and where you reside, among other things. In most jurisdictions, it is illegal for a driver to drive a car without fulfilling at least the minimum insurance requirements. The price of car insurance also varies by type of policy and the insurance company you get it from. In a nutshell, there’s a lot surrounding vehicle insurance that car owners and drivers ought to know. Without further ado, here are 6 things you should know about car insurance.

1. The Factors That Affect Your Car Insurance Rates 

Truly, the excitement of owning your dream 4-wheeled machine can be a bit overwhelming. When it comes to insurance, however, it’s not always a bed of roses, especially if you own one of those high-end luxury cars. As a matter of fact, you may need to buy extra insurance when renting a vehicle. If you are renting a small camper, your insurance rate may depend on the type and size of that RV. In this case, you will need RV insurance, which protects you in case of an accident or storm damage. However, the rates will also depend on whether you are a full-time or part-time RV enthusiast. Apart from the car model and purpose, other factors that affect vehicle insurance pricing may include the following:

  • Your age, gender, and marital status
  • Area of residence
  • Your credit score
  • The insurance company you approach

Just to explain the residence bit a little further, there’s something you should know. If you stay in an urban area where the crime rates are a bit high and traffic is congested, you are at a higher risk compared to someone in the rural area where there is no traffic and the cases of vandalism or theft are lower. This is also considered when determining the amount of money you should pay for car insurance.

2. Insurance Covers and Their Terms 

This is an area where most policy owners get lost. If you do not have an in-depth understanding of what each policy covers, you may have high expectations in case of an incident and you may end up being disappointed. For example, let us have an overview difference between comprehensive and collision insurance covers. Collision coverage pays for your car when you are at fault i.e. a collision with another vehicle, hitting potholes, a tree, and rolling your car. A comprehensive cover provides protection against damage and theft. It will also cover damages like falling rocks, fire, flood, and vandalism.

Besides, the law may require vehicle owners to purchase liability insurance, which is typically the most expensive policy. It covers the costs that come with damage caused by other vehicles, death, or injuries. On this note, some of the most common types of vehicle insurance include:

  • Collision insurance
  • Auto liability cover
  • Comprehensive insurance cover
  • Personal injury protection cover
  • Uninsured/Underinsured motorist cover

You can talk to your insurance provider for an explanation of what the different policies cover so you can decide what you need.

3. Insurances Prices Vary by Company 

Once you have a motor vehicle with you, you will feel the need to research insurance policies, their prices, terms, and conditions, among other things. As you maneuver around looking for car insurance, you will realize that no insurance company offers the same rates on a specific cover. They all use different formulas to assess risks and come up with the amount of money to charge. For the best results, shop around and get an insurance company that offers fair prices alongside excellent services. After researching the covers, it is important to have all your intended covers noted down and go around getting quotations so you can settle for the most ideal plan for you.

4. Do Not Let Your Policy Lapse 

To avoid paying more on car insurance, you will have to be on your toes. For example, if your vehicle insurance is expiring on the 30th of December, do not let the day arrive so that you can pay for another policy cover. Paying for it a week earlier would be the best option because you would have to pay more if the due date passes. Even if you are planning to change to another insurance company, make sure you purchase the policy from the new company before the old one is canceled. The reason behind the skyrocketing charges is because, when a vehicle is uncovered, it has a higher risk compared to a vehicle that is covered.

5. Your Coverage Affects What You Pay 

When you get into an accident or cause damage to property, the insurance company only covers what you have paid for, nothing more or less. As earlier mentioned, there is liability insurance which is legally required. While some car owners may think of reducing the amount of money to pay for that, it is important if you let it be as required by the law. This is because if you reduce the portion, you will be held accountable for any amount above the policy limits.  

6. Insurance Discounts Save you a lot 

The best things in life are free but since we cannot get insurance covers, why not take advantage of the small discounts we get? In fact, they save us a lot of money which can be invested elsewhere. When it comes to your favorite machine asset, you ensure that you give it the intended care and with the right company, all the effort will not go down the drain. Look for an insurance company that appreciates your effort as a driver or a car owner. Make sure you present your safe driving record, show the safety features in your machine, install, and show your anti-theft devices. Those are among other added advantages that will make you get discounts on your vehicle. If you find a company with no discounts, keep searching. Out of many, there is at least one.

Vehicle insurance is paramount to any driver. It is even more important to car owners. Especially if it is your first time purchasing car insurance, the above few points can help you navigate these streets.