When it comes to car insurance, you should do everything in your power to ensure that your car coverage reflects your needs and your budget. The vehicle that you own, your personal priorities, and your budget should factor into your unique auto insurance needs. Before you start comparing policies and insurers, you must evaluate how you use your car and what risks you face to figure out what options make the best sense for you.
To help you out, we have come up with a list of questions that you should ask before you get your auto insurance. This will help you get the coverage you need and ensure that you are adequately covered under all circumstances. So, without further ado, here are the questions you should ask before getting your auto insurance:
1. How Much Do You Drive?
Do you absolutely need your car every day, for example, to commute to work or for driving your kids to school and activities? Do you drive 100 miles a month or closer to 1000 or more? You should make sure that your policy reflects how much you are using your car. If you don’t drive a lot, you may want to opt for mileage-based insurance.
2. Will You Be Using Your Car for Work?
If you use your car not just to get to work, but to perform tasks for which you get paid, you must get commercial auto insurance at all costs. A personal auto policy will not provide you with coverage if you transport paying passengers through a ride-share service, deliver pizzas, drive as a courier, or use your car for other commercial activities.
3. What Type of Car Do You Drive?
Insurers have mountains of data available to them, and that lets them know in precise detail what types of cars, makes, and models are more or less likely to incur claims. A flashy sports car with a powerful engine may be more likely to be stolen, and its bodywork will cost more than on a mid-size sedan, and your insurance is going to be priced accordingly.
Some types of cars, like modified or classic cars, will require special insurance. By that same token, you will receive discounts if you have a ‘safe’ car, one with the latest safety features and has a good safety record.
4. How Much Do You Love Your Car?
If you love the way your vehicle looks and take pride in its appearance, you will likely want it fixed perfectly, or replaced with the same model, if it does get damaged. That means that you’ll want to consider the full range of insurance, which includes collision, comprehensive, and glass coverage.
On the other hand, if you drive a beater and only see your car as a means of transportation, and want to save on premiums, you may want to limit your policy to liability.
5. Where Do You Live and Park Your Car?
Where you are living is going to impact your insurance rates, and it may even be a factor in what type of coverage you end up purchasing. For instance, cars parked on the street in urban areas face a greater risk of theft or vandalism, and in that case, the best option for you would be comprehensive coverage. You may also discover that your premium rates will be lower if you move from a city to a suburb.
6. Who Else is Going to Be Driving Your Car?
In general, your car insurance is going to be covering other occasional drivers. However, if other drivers live with you and use your car, whether they are a spouse, a teen driver, or a housemate, you should list them on your insurance policy. That will ensure that you’re adequately covered should you get involved in a car accident where another driver uses your car.
7. What Are Your Legal Obligations?
Nearly every state requires that you carry minimum liability coverage for your car. At the very least, you will need to make sure that your policy complies with state mandates. However, the levels of required coverage are generally going to be pretty low. You should keep in mind that you may be sued for a large sum of money if you’re involved in a serious accident.
Depending on your assets and financial risk tolerance, to be safe, you will probably need to purchase a higher level of liability coverage for yourself.
8. Is Your Car Financed or Leased?
If you still owe money on your car or have to return it in good condition when a lease expires, you’ll likely be required to insure the car for its full value, and even for any gap between what you owe and the car’s market value. Comprehensive and collision will cover damage to your car, and supplemental gap insurance will cover the rest.
You should keep in mind that your insurance options and costs will also be affected by your age, gender, and driving record. You should also be aware that your credit score can also impact your insurance rates. Once you’ve looked at your needs and priorities, and understood how insurance options would match them, you’ll be better prepared to make an informed decision about the types and levels of insurance coverage that you need to buy.
There you have it, all the important questions that you should be asking yourself before you go ahead and buy yourself an auto insurance policy.