There are thousands of insurance companies across the country. This means that you have a lot of rate flexibility if you're focused on affordability. You might find out the smaller companies offer more competitive rates, better customer care, and more personalized services. When choosing a car insurance provider, what should you prioritize? Most experts would say that you should:
- Know your needs
- Understand the terms, definitions, endorsements, and exclusions
- Keenly check the available options
- Check the rates
- Check the company's reputation
- Understand what the policy covers.
Unfortunately, 68% of Americans assume that comprehensive auto insurance covers vehicle damage after a collision. To avoid such mistakes, consider the following tips.
Understand How the Prices Are Calculated
Some people incorrectly think that red cars cost more to insure than other cars, but this is not the case. The color of your car doesn't determine the cost—your age, marital status, and gender do. Insurers believe that male and younger drivers are more likely to cause an accident. Also, married drivers are less likely to make insurance claims. Younger drivers are termed as less experienced and therefore considered high-risk clients.
Where you live also determines the cost. If you live in a busy city with a higher crime rate, you might pay higher premiums than someone residing in a quiet, safer, and less populated rural area. In some states, the credit score is also a significant factor. It's assumed that drivers with a better credit score rating tend to be more careful on the roads.
A more expensive car might not cost more to insure. It's good to check the insurance cost of various models before you purchase one.
Understand Comprehensive and Collision Insurance Policies
As stated earlier, many people incorrectly think that comprehensive insurance covers car damage after a collision. Comprehensive insurance protects a vehicle from theft and damage from incidences not related to collisions such as fire, vandalism, hailstorms, falling objects, floods, and hitting wildlife. On the other hand, collision insurance covers against a direct collision with another vehicle or objects such as guardrails or trees.
Know Your Deductibles
Requesting for higher deductibles lowers your insurance costs. For instance, increasing deductibles from $200 to $500 reduces your collision or comprehensive coverage by 15% to 30%. Before going for higher deductibles, ask yourself whether you are comfortable taking the extra financial risk and have enough finances to cater to the deductibles when the need arises.