How to Buy Car Insurance
Once you’ve done all the car shopping as well as figured out the financing, finally you can buy the used car you’ve had your eye on and start driving, right? Wrong! You still have to get your car insurance lined up. Yes, it feels like throwing money down the drain every month for something you may never even use, but if you wind up in an accident that’s your fault and other cars or people get hurt, you’ll be in deep trouble without adequate car insurance.
Everyone nowadays says that all you have to do is call up one of the well-known national brand-name companies and you’ll be all set because they all offer such cheap insurance. But to make sure you’re getting the coverage you need at the best price possible, you should still do some comparison shopping so you can make an informed decision.
First, make sure you know what the minimum requirements are for different kinds of coverage in your state. New Hampshire is the only state that doesn’t require specific coverage, so if you don’t live there, then you have to meet some minimum standards. Here’s what the state of California requires (source):
Bodily injury liability: $15,000 for injury/death to one person.
Bodily injury liability: $30,000 for injury/death to more than one person.
Property damage liability: $5,000 for damage to property.
Please note that these are minimum requirements. If you’re in a serious accident and found to be liable, the injured parties are probably going to be seeking a lot more than those amounts of money. Consumer Reports recommends bodily injury liability of $100,000 per person or $300,000 per accident, and property damage liability of $100,000 (source). What’s right for you and your budget is probably somewhere in between the state requirements and the Consumer Reports recommendations.
When you start looking into different car insurance providers, check out customer reviews just like we recommended you should do for used car dealerships. If you see consistently poor reviews about how difficult it is to process claims or many complaints about bad customer service and so on, pass that company up and look at another. There are lots of options out there, so take some time to explore. And keep in mind that some companies don’t offer information up-front about their discounts, so be sure to ask.
Another comparison point between insurance companies is what discounts they offer. More and more companies are offering discounts based on safe driving habits, which can be tracked over a period of time with a device you plug into your car’s diagnostic port. Other discounts might be based on driving fewer miles, having a low-mileage car, putting multiple vehicles on the same plan, and bundling your car insurance with other kinds of insurance you need, such as home insurance.
Another way to keep your car insurance costs down is to make your deductible higher. Figure out what you could handle in your budget for a deductible if you have an accident. The higher your deductible, the more your premiums go down. If you’re driving an older vehicle, say more than five years old, it may be worth your while to drop both comprehensive and collision coverage and pocket the savings – or set them aside in order to set a higher deductible.
As you can see, there are lots of ways to keep your car insurance costs under control. All it takes is a bit of time and effort on your part to get the deal that’s right for you.