10 Things You Need to Know About Car Insurance

10 Things You Need to Know About Car Insurance from North Carolina Lifestyle Blogger Adventures of Frugal Mom

It doesn’t matter whether you’ve got a fancy new ride or an old clunker. Or whether you’re a natural behind the wheel or someone who’s terrified of the road. You absolutely must have insurance, not just for your own protection, but also for the protection of those who share the road with you.

When shopping for car insurance, don’t make finding the cheapest rate your highest priority. While it’s nice to keep cash in your pocket, things will get hairy quick, both personally and financially, if you get into a bad accident and your policy won’t cover you.

So, what factors should you consider when getting auto insurance? Read on to learn about the 10 things you need to know about insurance for your two/three/four/eighteen-wheeled investment.

Don’t Aim Too Low

Let’s say you have an absolutely flawless driving record and you trust your instincts behind the wheel. You may be thinking, why do I need more than the minimum amount of insurance coverage allowed by law if I’ll never get into an accident in the first place? To put it bluntly, this is flawed thinking. We live in a world of chaos, and that means even the best drivers in the world face the risk of a crash. When the worst occurs, you want to have yourself adequately covered, or you may end up paying a lot more than you “saved” by getting cheap insurance. Seriously consider taking more than the legal minimum because it will most likely save you a lot of pain—and money—in the end.

Ask About Discounts

There are tons of discounts for auto insurance that people don’t take advantage of simply because they are not aware of it. Most insurance companies reward customers who take steps to increase their safety because safer drivers tend to make fewer claims and fewer claims mean fewer payouts. It’s a win-win situation for all.

Discounts are commonly given for good driving records, completion of a defensive driving course, installation of vehicle alarms and other safety features, and so on. Ask your insurance agent about the discounts for which you might be eligible.

Bundling Policies Can Save You Cash

Some insurance companies will give you a huge discount on both your auto and home policies if you combine them. Just make sure you get adequate coverage for both.

Keep Your Options Open

While customer loyalty has its benefits such as discounts and rewards, it still pays to shop around at least once a year. A recent study found that drivers who switched policies saved hundreds of dollars. In financial decisions as in most things in life, never settle for less because it’s familiar.

Does the Insurance Company Provide Coverage for Rental Cars?

If heaven forbid, you get your car totaled in an accident, you will need a rental car to go about your daily life. Getting coverage that gives you an allowance for a rental will be cheaper in the long run than paying the full prices for a rental.

Never Lie on a Claim

Even if it’s just a “little” lie, it’s not worth it. Insurance companies penalize people who lie on their claims by increasing their rates or dropping them altogether. Whatever money you might save by lying is nothing compared to the consequences of getting caught. As always, honesty is the best policy.

Be Smart About Filing Claims

Use your insurance company’s coverage, don’t abuse it. In other words, avoid filing tons of claims for the smallest things. Otherwise, the insurance company may start to suspect your motives and deem you an unreliable customer, raising your rates as a result.

Avoid Monthly Payment Plans If You Can

Insurers love when customers opt for installment payments because it makes customers feel like they’re paying less when they’re actually paying more in the end. If you can afford it, pay for your policy in one shot—it’s cheaper that way.

Personal Policies May Not Cover Work Vehicles

If you constantly use your vehicle for work—say, you’re a traveling salesperson, a pizza delivery person or an Uber driver—make sure your policy covers work use. Otherwise, you may be blindsided by lack of coverage if an accident occurs during your duties.

Review and Adjust

As your vehicle ages and changes, your needs will change along with it. For instance, back when your vehicle was fresh off the lot and worth tens of thousands of dollars, collision coverage was an absolute necessity. However, now that it’s a clunker worth a thousand bucks or less, you may safely shed that coverage without consequence. Don’t forget to take time to reevaluate your insurance policy and get rid of unnecessary costs.

In closing, when shopping for insurance, shop smart. Because when the unthinkable happens, you want to be ready for it.

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2 Comments

  1. These are a lot of great tips. Great to follow if you are looking to save money. I usually try and pay my insurance in full to avoid the extra fees. Its also best to ask for discounts. You never really know until you ask. Great tips!

  2. Just what I needed. I just bought my first car last month and definitely, this is up next! Thank you for sharing these awesome tips. It really is a big help.

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