Auto Insurance Basics That Save
by Penny M. Hagerman
Buying auto insurance is a little like ordering a gourmet hamburger: once you've got the "guts" of it, anything else layered on top is simply extra.
Food aside, most people purchase the bare minimum in insurance protection for their automobiles. But what they don't know about their auto policy could cost them.
Not only can they end up without additional "toppings" that could spare them later distress, pain and expense; they could also end up forking out a lot of money on auto repair and medical bills unnecessarily.
Did You Know?
One of the best ways to save money on auto insurance is to compare policies side by side.
But before doing so, it's wise to have some automobile insurance basics under the belt. This builds a solid foundation of knowledge that helps ensure the right auto policy at the right price.
Consider these important facts:
- Every state requires drivers to carry vehicle insurance. Foregoing auto protection could result in license suspension or revocation, costly fines, high insurance costs, and even confiscation of personal assets if an at-fault auto accident occurs and someone gets hurt.
- The insurance policy follows the automobile—not the driver. If someone else borrows the vehicle and causes an accident, the auto policy in effect on the offending vehicle is the one that pays out—and high auto insurance rates may result.
- Items left in the auto often aren't covered under a traditional car insurance policy. Instead, those items may be compensated for under a renter's or homeowners policy, if one is in effect. Before deciding on an automobile policy, talk to a licensed auto agent, who can help determine the coverage needed for those types of items in case of theft.
- Some auto insurance companies offer "accident forgiveness" that could keep rates from skyrocketing in case of accident. Ask an agent about this type of automotive plan, which usually allows one or two accidents before hiking automotive rates.
- Excessive driving raises vehicle insurance rates. Insurers base the price of auto premiums partially on the number of miles driven annually. So it just makes sense that those who drive more pay more. To keep auto mileage low, take advantage of other means of transportation available—or walk whenever possible—to keep insurance rates low.
- It's usually not wise to make small auto claims. Though doing so may help get damages repaired, it may also cause auto premiums to rise more than the cost of those repairs. Instead, set up a savings account which can be used for just such incidences.
- It's cheaper to insure multiple automobiles under the same policy than under separate plans. Bundling cars together earns the insured a discount, and helps save money on the right auto insurance plan.
- Some companies offer military personnel discounts. For maximum savings, let the insurer know before shipping out both the return date and where the automobile will be parked or stored during the tenure.
With a clear understanding of principles like these, it's easy to compare insurance policies; choose the plan that best protects automobile, driver and others on the road, and save money over the life of the policy.
Auto Insurance that Fits
Whether buying just the basics or topping them off with extras, the first step to saving money on auto insurance is understanding the basics. Once you've got that down, request your free auto insurance quotes for the right coverage that fits.