1. how much do you drive?
Do you absolutely need your car every day, for example, to get to work or take the kids to school and activities? do you drive 100 miles a month or closer to 1000 or more? make sure your policy reflects how much you use your car. if you don’t drive much, you may want to opt for mileage-based insurance.
2. will you use your car to work?
If you use your car not only to get to work, but also to perform tasks you get paid to do, business auto insurance is a must. A personal auto policy will not provide coverage if you transport paying passengers through a ride-sharing service, deliver pizza, drive as a messenger, or use your car for other business activities.
3. what kind of car do you drive?
Insurers have mountains of data and know precisely what types of cars, makes and models are most or least likely to have claims. A flashy sports car with a powerful engine is more likely to be stolen and the body costs will be higher than a mid-size sedan, and your insurance will be priced accordingly. Some types of cars, such as modified or classic, require special insurance. Similarly, you can receive discounts if you have a “safe” car, one with the latest safety features and a good safety record.
4. how much do you love your car?
If you love the look of your vehicle and take pride in its appearance, you’ll probably want to get it perfectly repaired, or replaced with the same model, if it gets damaged. That means you’ll likely consider the most complete range of insurance, including collision, comprehensive, and glass coverage. On the other hand, if you drive a beat-up car, view cars simply 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 live will affect your insurance rates and may be a factor in the coverage you purchase. For example, cars parked on the street in urban areas face a higher risk of theft or vandalism, so comprehensive coverage might be a good option. you may find that your premium rates are lower if you move from a city to a suburb.
6. who else will drive the car?
Usually your auto insurance will cover other occasional drivers. however, if other drivers live with you and use your car, whether it’s a spouse, teen driver, or housemate, they should be listed on your policy.
7. What are your legal obligations?
Almost every state requires you to have minimum liability coverage for your automobile. At a minimum, you must ensure that your policy complies with state mandates. however, the coverage levels required are generally quite low. Keep in mind that if you are involved in a serious accident, you can be sued for a large sum of money. Depending on your assets and tolerance for financial risk, to be on the safe side, you’ll probably want to purchase a higher level of liability coverage.
8. Is your car financed or leased?
If you still owe money on your car or have to return it in good condition when the lease is up, you’ll likely need to insure the car for its full value, including any gap between what you owe and market value. of the car. collision and comprehensive will cover damage to your car, and supplemental insurance will cover the rest.
Keep in mind that your insurance options and costs will also be affected by your age, gender, and driving record. Also keep in mind that your credit score can also affect your insurance rates. Once you’ve analyzed your needs and priorities, and understood how insurance options will fit them, you’ll be better prepared to make an informed decision about the types and levels of coverage to purchase.
Now that you know your needs, here’s how you choose an insurance company.