Having car insurance is mandatory in most jurisdictions, but you're pretty much on your own after that. It's up to you to decide what type of insurance you'll get, how much you're willing to pay, and which company you'll sign up with.
It's understandable if you're confused, especially if you are new to car insurance. You're afraid to make a mistake and get less coverage than you need, or the wrong type of policy only to find when you get into an accident, you're not covered. Don't worry, consult this list of things you need to consider when choosing a car insurance policy.
What Type Of Insurance Do You Need?
This is the first thing you'll need to consider when shopping for car insurance. Various factors will influence this, i.e., your age, where you live, and how often you drive. This is not an all-inclusive list, but in compiling it, essentially you will want to examine how your daily life impacts your driving habits and your car.
For example, do you use your car for work? Do you live in an area prone to certain types of weather? Do you drive every day or only occasionally? If you use your car for deliveries or to transport people, there is special insurance for that. Similarly, if you live in a flood-prone area, there's a type of insurance that covers that as well. Let's look at some of those now.
Liability Insurance
Liability insurance is also mandatory in most places. This type of insurance covers you if you are at fault in an accident and will assist in covering the cost of repairs to the other party's car as well as certain medical costs.
Comprehensive Insurance
You can refer to this as “bells and whistles” insurance. It covers a number of extras like damage caused by collisions with animals, certain weather events, like damage from floods and hail, even theft and vandalism. According to an Ottawa car insurance company, most comprehensive policies come with a deductible. A deductible is an amount you pay before your insurance coverage kicks in. Usually, the higher your deductible, the lower your premiums.
Uninsured/Underinsured Driver Insurance
If you often drive, you increase the odds that you'll have an accident sooner or later. What if that accident is with someone who doesn't have insurance. If you don't have this kind of coverage, you can be stuck with the expenses for your repairs and injuries.
What Type Of Vehicle Do You Have?
The type of vehicle you drive is an important consideration in figuring out what type of insurance you want to buy. If you own an expensive sports vehicle or a luxury sedan, the type of insurance you will want to get for it will typically be more expensive than if you had a cheaper or older car.
This is because your sports car or luxury sedan's repair costs will be higher than a cheaper or older car. For these vehicles, you will probably go all out and get all the different types of insurance, collision, comprehensive, liability, etc.
Cars depreciate in value as soon as you drive off the lot. That's why you don't want to spend a lot of money getting certain types of insurance for an older or cheaper car. If you get into a collision, for example, it's likely the insurance company will cover only up to the value of the car, when your repair costs may be far more. For an older or cheaper car, a basic insurance package may be better.
How Easy Is Your Policy To Understand?
This one is important, especially if this is your first car. Purchase the policy whose terms you find easy to decipher. Don't be swayed by a persuasive car insurance agent with a quota to meet at the end of the month.
You may find yourself with far more insurance than you need because the agent is always trying to upsell. Worse, the coverage may be all wrong for you and when you need it, you may find it doesn't cover your particular situation. Read the policy before you sign it, and ask for anything you don't understand to be explained.
The Reputation Of The Company
Does the insurance company you are considering have a reputation for avoiding claims, even when they legitimately fall under the terms of the contract they signed with customers?
That's an insurance company you want to avoid. Only purchase insurance from companies that have a good reputation and a solid track record.
It's important that you get your car insurance right. Your ability to bounce back after an accident depends on it.
