Car insurance is something we all must purchase. It’s one of those necessary evils that we must have but don’t enjoy paying for. Also, ironically, we hope we never use it! But the less we pay and the more we understand about our auto insurance policies, the better off we’ll be.
The lower the premium on our vehicle insurance, the better we feel. The best way to keep the lowest car insurance premiums affordable is to avoid having at-fault accidents and moving violations. All major companies use your driving record when an application is being underwritten. And nothing increases rates more than multiple tickets and accidents.
In recent years, credit reports have also been utilized by insurers in the underwriting process. There is no doubt that adverse credit will negatively impact your car insurance rates. Since consumers have access to free annual credit reports, it is highly recommended you take advantage of that feature and closely monitor your personal and family credit. You do not have to subscribe to any new service or pay a fee to receive your credit scores.
One of the most important aspects of your policy to understand is the actual benefits and coverage that you are receiving. Although you can view an updated declarations page every 6-12 months, most consumers don’t take the time to read them. The “dec” page illustrates important coverage such as your liability limits (including uninsured and underinsured benefits), medical payments, collision and comprehensive deductibles, discounts you are receiving and surcharges that may be increasing your rate.
Perhaps the “bodily injury” and “property damage” components of your policy are the most important. Although most states require minimum limits on your vehicle insurance, these limits are typically extremely low. In most states the bodily injury per person requirement is between $12,500 and $25,000. In the event of a lawsuit, more than likely, these limits will leave you woefully short and may place a portion of your assets at risk.Your property damage minimum requirements are usually about $7,500 to $15,000. Now imagine if you innocently slipped on an icy road and hit and totaled two vehicles. What are the chances that the damages would exceed $7,500? Quite High! For this reason, unless you are prepared to pay about $20,000 (or more) out of your own pocket, ensure your personal policy property damage is at least $50,000.
Collision and comprehensive coverage is only required when you are financing your vehicle. While providing physical protection for your car or truck, it also provides the lending instruction some protection in their investment…which is your ability to make your monthly payments. You have some flexibility regarding which deductible options to select. Naturally, lower deductibles will increase the rate you pay.
Car insurance doesn’t have to be expensive. If you understand what discounts are available and how and when to take advantage of them, you’ll pay less. Knowing when to shop and compare plans is vital to maintaining affordable premiums. An experienced licensed broker will always help you maintain the optimum coverage at a cost you can afford.