Before Signing Your Car Insurance Policy
It's imperative that you understand all aspects of an auto insurance policy before agreeing to purchase the coverage.
Regardless of whether you're purchasing a new or used vehicle, the following tips will help point you in the right direction when you're deciding on car insurance.
Know Your State's Legal Requirement
It's important to research the minimum insurance requirements in your state of residence—in most cases, you'll need to at least have some form of liability insurance. The requirements can differ from state to state and even year over year, so be as diligent as possible when finding this information.
Remember, you aren't limited to your state's minimum insurance requirements. Even though your state may only require you to have liability insurance, you may want to consider investing in collision and comprehensive insurance for personal injuries and damages.
If you purchase comprehensive auto insurance, the policy may also include roadside assistance. Coverage without this inclusion means you'll have to pay additional money if your car needs roadside assistance (e.g. towing, tire change, gas, etc.)—by investing a little bit more, you may end up saving money in the future.
Rates & Your Driver Profile
Your car insurance policy and premium rates depend on certain factors, including:
- Previous accidents.
- Your age.
- Your neighborhood.
- Vehicle safety features.
- Enrollment in defensive driving courses.
If you're a relatively experienced driver with a clean driving record AND your potential policy still has high premiums, maybe it's time to look at another carrier.
Coverage for Others
If you're not the only driver of the insured vehicle, you need to verify the car insurance policy covers all other drivers. Your car insurance should also cover passengers in case they're involved in an accident with you.
Bottom line: You want to ensure every person who sits in your vehicle is covered by your car insurance policy.
Additionally, you may want to look into uninsured or underinsured motorist insurance. This type of coverage pays for expenses if a motorist without insurance or with insufficient coverage causes an accident involving your vehicle.
Read the Fine Print
Once the details of your policy are finalized in writing, read it over and pay special attention to the fine print. If you don't understand any part of your policy, do not hesitate to ask the agent or representative for an explanation. Your auto insurance policy has a huge impact on your life—take ownership of it!