best car insurance Archives - Everday Resources

Many factors go into auto insurance decision making. Not only do you have to consider your premium, but you also need to decide what kind of coverage you need and how much to purchase. All of these things make it difficult to buy a car insurance policy.

Fortunately, you can better prepare yourself for car insurance shopping when you evaluate your personal priorities. In addition to calculating your budget, you should ask yourself eight questions to which policy options are best for you and your needs.

1. How Many Miles Do I Drive?

If you’re a stay at home mom or telecommuter, you might not put more than 100 miles a month on your car. However, you could easily put more than 1,000 miles on your car every month if you have a long commute to work. It’s important that you find an insurance policy that reflects the miles that you drive. For example, a mileage-based insurance would be a great option for low-mileage drivers.

2. What Do I Use My Car For?

You need to consider how your car will be used in order to find the proper coverage. If you are simply driving to work or using your car for personal reasons, a standard car insurance policy should be fine. However, you may need to get commercial insurance if you use your vehicle for rideshare, delivery, or any other tasks that you get paid to complete.

3. What Kind of Car Do I Own?

The type of car that you own can have a huge impact on your insurance rates. Not to mention, it impacts the type of coverage you require. Any modified or classic cars require special insurance. If you have a sportscar, you might not need a particular policy, but you should expect higher rates since your car is more likely to be stolen or damaged. On the other hand, customers with “safe” cars can usually enjoy discounts for safety features.

4. Where Do I Live?

Your location can also affect your insurance rates tremendously. People in urban areas are more likely to be victims of theft and vandalism, so they spend more money on car insurance. Customers in rural or suburban areas typically have lower insurance rates. While you might not be able to control where you live, you should keep in mind how your location can impact your insurance policy.

5. Where Do I Park My Car?

Do you often park your car in the street? Do you keep it in a garage? Where you park your car can also be a risk. If you live in area where you park on the street, you also have to worry about other drivers hitting your car along with the risk of theft. If you don’t have a garage, your car is also susceptible to damage from hail, fallen branches, and more, so we recommend upping your comprehensive coverage.

5. Will Anyone Else Drive My Car?

Most car insurance policies cover occasional drivers, but you should make sure that frequent drivers are all listed on your policy. A frequent driver could be anyone who lives with you and borrows your car often. They could include a spouse, teenage children, roommates, and more.

6. How Much Do I Love My Car?

If you drive an old car and don’t care about its appearance, then you could buy the bare minimum insurance policy. Full coverage insurance would be better suited for anyone who loves their car and take pride in caring for it.

7. Do I Own My Car?

Leases and financing are great options for acquiring cars, but they can impact your auto insurance policy. You may be required to insure the car for its full value or the gap between what you owe and its current market value. This insurance is called supplemental gap insurance since it goes along with your collision and comprehensive coverage.

8. What Are the State Requirements?

Every state has its own rules and regulations for car insurance. It is up to you to research and find the minimum liability coverage for your vehicle.

Request a Auto Insurance Quote

Now that you know more about your car insurance needs, you should be able to find a great policy. We suggest that you start out by getting a car insurance quote from several companies with similar coverage levels. By doing so, you can get a fair comparison and find the right option for you!

Type of Car Insurance Coverage

Before you can select any policy, you need to know about the different types of car insurance coverage. While some coverage is designed to protect you, other insurance pays for damages and injuries you cause to others. The following are just a few of the most common insurance coverage options:

Liability

This type of coverage is for others. Specifically, auto insurance providers design bodily injury liability to cover injuries or deaths that you caused with your car. Property damage liability covers vehicles or other property damaged by an accident you caused. Almost all states require drivers to carry a minimum liability policy.

Collision

If you want to cover your car’s damage when you cause an accident, you need collision insurance. It covers the cost of repairing or replacing your vehicle whether you hit a car, pole, tree, or another object.

Medical Payments and Personal Injury Protection (PIP)

Several states also require that drivers carry insurance for medical payments or personal injury. This plan reimburses you for medical costs associated with an accident. They also cover lost wages for you and your passengers.

Uninsured Motorist

In the event of a hit and run, you will be thankful for this insurance. It provides you with coverage when the driver at fault lacks enough coverage to pay for the damages he or she caused.

Coverage Amounts

Once you know what type of coverage you need, you must choose the amount. As with the coverage types, your state often determines the minimum amount of coverage you must carry. It could be as low as $10,000 a person or $20,000 for a single accident. On the other hand, insurance companies can set maximum limits for liability coverage.

Obviously, you shouldn’t choose more coverage than you can afford, so you need to find the balance between your budget and your needs. Since many cars can cost upwards of $40,000, you should aim for at least that much in property damage coverage. If you own a more expensive vehicle, we recommend upping your coverage in case an underinsured driver hits you. These are just a few of the things you should consider when selecting your coverage amount.

Car Insurance Rates

Your car insurance premium can vary greatly from the next person’s—even with the same coverage and deductibles. We know that sounds crazy, but it’s true! Insurance providers don’t base your car insurance quote on those two factors alone. In fact, there are a lot of different things they take into consideration when calculating your payments, including:

Location

Age

Gender

Years of Driving Experience

Marital Status

Vehicle Type and Use

Claims History and Previous Coverage

Miles Driven

And More!

While your claims history and driving experience make sense, you might wonder, “what do my gender and marital status have to do with my insurance?” They are risk factors determined by claims data. For example, young drivers are statistically proven to be the riskiest drivers to insure. Therefore, your rates are much higher when your 16 than when you turn 25.

It’s important to note that while all of these factors are considered, they don’t carry the same weight. Each insurance company weighs them differently, which is why they charge different rates.