When unforeseen circumstances arise, the last thing you want is to deplete your savings to cover damages. You should make the necessary investments to maximize protection to guard yourself in such events. This is particularly true for automobile owners, as CNBC reports that US traffic deaths reached a 16-year high in 2021 — a 10.5% increase from 2020.
Having the right automobile insurance is one of the best ways to protect yourself from the repercussions of accidents or mishaps. In most States, acquiring auto insurance is also required by law. Read below to find out how you can choose the best auto insurance policy to suit your needs.
Table of Contents
How To Get the Most Out of Your Auto Insurance Policy
1. Assess Your Needs
Before choosing what coverage options to include in your insurance, you should first discern what accidents fall under each policy and how likely they are to occur to you. Sound Dollar explains that the three main types of auto insurance are liability, comprehensive, and collision.
- Liability insurance pays for damage you incur on another’s body or property.
- Collision covers damage to your car in an accident.
- Comprehensive insurance pays for theft, vandalism, natural disasters, and accidents involving animals.
While it may seem reasonable to acquire all three policies, try to assess your situation to see whether each would be a good investment. For instance, as comprehensive insurance is often optional, you should determine the likelihood of theft or vandalism in your neighborhood. Properly evaluating risk factors in your lifestyle and area ensures you’re paying for only what you need.
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2. Compare Insurance Quotes
Once you’ve got a good grasp of your needs, you should start shopping around for your auto insurance. It’s necessary to compare at least two or three quotes before settling on the policy you will purchase. That’s because not all policies are created equally, and beyond the premium, you would also need to assess other factors.
NextAdvisor mentions that car insurance quotes are based on the information you provide the insurer about yourself. In addition to your personal information, they may ask you about your driving record, previous insurance claims, and credit-based insurance score to assess your premium.
When evaluating your quotes, try to see whether each has the same deductible, limits, and coverage. Review the fine print to see whether there are any additional coverages or exclusions that stand out between quotes. Try and see whether their costs match up to their services.
Consider the customer experience and feedback as well. You would want to know that the company you’re set on is trustworthy. And although some quotes may be more expensive, you might want to consider whether they provide greater ease when managing your policies.
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3. Bundle Insurance Policies
A practical way to save up on your insurance is by bundling. This is more formally known as a multi-policy discount or multiple-line discount. US News states that bundling involves purchasing more than one insurance policy from the same company to save on your premiums.
For instance, you can buy both home and auto insurance policies from the same provider. This can result in savings between 5% to 25% compared to if you bought individual policies from different companies.
Many insurers rely on bundling to increase sales since clients acquire their services for both assets instead of going to separate companies. But this can also be largely beneficial for the customer since bundling can provide great convenience. This is because it allows you to track and handle your policies with just one app or website.
4. Boost Your Credit Score
An unexpected way to save on auto insurance is by boosting your credit score. A higher credit score can get you better deals on your car loans. It can also improve your car insurance rate significantly. Poor credit, on the other hand, might increase your insurance rate. This is because insurance companies use your credit score to predict insurance losses better.
Our article ‘How to Build Credit – 9 Simple Steps to Achieve Your Dreams’ details how you can do this easily. One method we discussed was paying your balance fully and making bill payments on time. If you currently have a bad credit score and thus a high auto insurance premium, continuously working to improve your credit can pay off.
Once you’ve raised your credit score, you can check in with your current auto insurance provider to see whether your rate can change. Otherwise, you can compare quotes with other insurance companies to see if another can offer you a better deal.
5. Heighten Your Safety
Most, if not all, insurance premiums are based on your risk factors. So one great way to both lower your insurance premium and the risks of car-related mishaps is to maximize your safety. There are multiple ways to do this.
The first one is to choose a car with safety features, like electronic stability control (ESG), which can qualify for a discount. MyCarDoesWhat.org mentions that ESG helps prevent the loss of control in emergency maneuvers by stabilizing your car when it begins to move away from the intended path. This can significantly reduce the chances of being in a rollover.
Another way you can leverage safety to benefit your premium is by taking a defensive driving course. Eligibility for discounts varies depending on state law and the insurance company’s policies. But these courses can typically grant you a discount ranging from 5% to 20% of your premium.
Lastly, endeavor to be a safe driver. This one is simple, as your premium will continue to increase the more violations you incur. Keeping yourself free from moving violations, such as running through a red light or driving under the influence, will keep your premium stable.
Applying for auto insurance can save you a lot of stress in the future when circumstances beyond your control happen. If you make the right choices with your policy, you can maximize the benefits you yield in the long run.
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