Auto insurance, also known as car insurance, motor insurance and vehicle insurance, is an agreement between an insured person or group and an insurance company. It is a type of insurance purchased for vehicles like cars and trucks. The primary purpose of an auto insurance is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.
This part will offer important guidelines to help you choose the right auto insurance.
1. Shop for insurance before buying a vehicle.
The best way to save money on auto insurance is to get the best deal possible. And the best way to get the best deal possible is by shopping around for auto insurance. This is best done before purchasing a vehicle.
Many people tend to stay with the same company not realizing how much money they could have saved had they shopped for insurance first before settling in an insurance company. Before purchasing a vehicle, compare insurance quotes first, at least twice a year as rates are always changing.
Comparing multiple company quotes will increase your chances of finding lower rates as rates vary from company to company. You can get free quotes online from insurance companies and independent agents, people who represent several insurance companies. Changing your mind if you find a vehicle with a lower rate is also possible. This is why you should shop for insurance first before you buy a vehicle.
2. Take advantage of discounts or premium reductions, or special insurance rates such as:
a. Low mileage discounts - the shorter the distance you drive, the lesser your premiums will be.
b. Good student discounts - some auto insurance companies give discount on auto insurance to students who are currently enrolled and have good grades.
c. Multi-car discounts - insuring more than one car in one policy can qualify you to a multi-car discount.
d. Other policies - you can also reduce your premium by availing of other policies with the same company.
e. The safe vehicle discount - installing safety devices and anti-theft devices like air bags and alarms can earn you discounts.
f. Age (being at least 25 years old) - Generally, insurance premiums tend to become lower at the age of 25 as the risk of at-fault accidents decreases as he or she is believed to become more responsible.
g. The good driver discount - completing a driver's training and maintaining a spotless driving record in the last 3-5 years are offered this type of discount.
h. Avoiding installment fees - you can save money by paying 6 months and 12 months of an auto insurance premium in advance instead of monthly.
i. Prior insurance - those who have been continuously insured for the last 6 months or more are given discounts by some insurance companies.
j. Good credit score - The higher your credit score, the better it is as it can earn you a lower rate as insurance companies usually adjust rates by judging your risk.
k. Car pooling and public transportation discounts - frequent use of carpooling and public transportation means less driving, which means less accident. For this, some insurance offer discounts.
3. Be knowledgeable about coverage
a. Do not pay for coverage that sums up to more than what your car are worth or even the same. Disregard unnecessary coverage.
b. Your premium will be lower if your deductible is higher. Consider higher deductibles when including physical coverage to your car. Deductibles are your own money that you spent before the insurance company pays for anything.
However, if you get involved in an accident, the amount of our deductible will be the same amount that you will pay before your insurance company starts paying for the rest of the covered damage to your vehicle. So, be careful not to get involved in an accident.
c. Avoid unnecessary or duplicate coverage. Paying premiums for repairs on a badly damaged car is not a good idea as you would probably replace it anyway. If you already have a medical coverage you might not need another health insurance policy. If your car is not worth much and is old collision coverage is not necessary.
