Buying auto insurance isn’t like buying travel insurance or home insurance. That’s because you need at least third party insurance to legally drive on the roads, meaning that auto insurance isn’t just nice to have. It’s a full on necessity.
At the same time, there’s no shortage of options out there, and it’s not like any one company has a monopoly on the market. All auto insurance providers are in constant competition with each other, and they compete on everything from price to how much their policies actually cover.
The key to getting a good deal on your auto insurance is to ask the right questions going into it. With that in mind, we’ve listed the seven most important questions you need to ask yourself before signing on the dotted line, whether you’re a new driver or a seasoned veteran.
1) How comprehensive does the coverage need to be? Third party coverage is the bare minimum and will cover any damage that you do to other people’s vehicles. More comprehensive coverage will also include any damage to your own vehicle as well as medical expenses and more.
2) How often do you drive? If you’re racking up huge mileages, you may want an insurance policy which reflects that. Some are even based entirely around mileage.
3) What’s the crime rate in your area? If you live in the city or in some other area with a high crime rate, your premiums will go up as a result of it. The same may hold true if you work in a high crime area or plan to park the car in one.
4) What make and model of car do you drive? Certain types of vehicle are more high risk than others. Expensive cars are more likely to be stolen, for example, while older cars are more likely to break down and to require repairs.
5) Who else will be driving the car? Most coverage will cover other drivers, but it’s better to be on the safe side. If you’ll be sharing the car with a friend or family member, you’ll need to make sure that they’re covered by the insurance.
6) Will you be using the car for work? If so, you’ll want to consider commercial auto insurance, as most personal coverage won’t cover you to use the vehicle for work.
7) Is your car loaned? If you’re still paying off the rest of a loan, you may be required to take out a policy that covers the full cost of the car. That’s because if the vehicle is damaged or written off completely, the company needs to know that they’ll still get paid.
Auto insurance is a necessary evil if you want to drive, but it’s easy enough to take out a policy. The real challenge comes from taking out the right policy – after all, if you pick the wrong one, you’ll end up paying more than you need to and potentially not even leave with the coverage you need.
On top of that, once you’ve taken out a policy, it’s hard to cancel it. You may be required to pay the full balance before leaving, and so if you decide that you want to switch providers, it’s usually best to wait until your contract is due for renewal.
The good news is that the more you drive, the more your premiums decrease, especially if you’re able to maintain a no claims bonus. That’s also why many people prefer not to make a claim if there’s some minor damage because it can work out cheaper to fix it themselves than to claim on the insurance.
Now that you know which questions to ask yourself, the next step is to start shopping for providers. Consider using comparison websites or putting in the legwork yourself to get quotes from a number of different insurers to see which one works best for you. You’ll be on the road in no time.