Whether you have a brand new vehicle or bought it second-hand, owning your first car is always special. It’s a milestone that provides you with mobility and greater responsibility. Part of that responsibility is making sure you’re insured for anything untoward that could happen on the road.
It can be tempting to forego auto insurance. After all, you’ve probably just spent a significant part of your savings to buy your new car. However, you face a far greater risk of incurring financial liability if you don’t get proper coverage for yourself and your vehicle. For first-time buyers, the key is to get just the right balance between adequate insurance coverage and affordable premiums.
Your insurance agent or financial adviser should be able to offer you options that fit your insurance needs and your budget. However, talking to an agent for the first time can easily make you feel out of your depth and cause you to make rash decisions that you may regret later. The best way you can avoid this is to read up on auto insurance and equip yourself with information. In this article, we’ll give you some essential tips to start with.
Know Your Minimum Insurance Requirements
Each state has a prescribed level of insurance coverage that every driver must comply with. Whatever insurance package you end up with, it must meet these requirements at the very least.
You can familiarize yourself with the state requirements and use it as a base reference for how much coverage you want to include in your policy. You can also use this information as a rough guide for how much budget you need to allocate for auto insurance.
Determine Your Budget
Ideally, you’d already have factored car insurance into your budget before you purchase a car. Consider your income each month, and subtract your expenses and savings. Then consider how much you’re willing to spend on what’s left on auto insurance. You may need to be flexible while you’re still in the process of determining your insurance coverage needs.
Prepare a higher and lower budget limit that you can share with an insurance agent. This will help them give a good idea of what you can afford, allowing them to determine the most optimal options for your insurance package.
Learn About The Different Kinds Of Coverage
Your insurance agent will talk you through a variety of auto insurance coverage their company offers. It’s easy to lose track of the insurance terminologies, so do a little research on the auto insurance coverage before you meet with the agent. The most common and basic kinds of auto insurance coverage you should be familiar with are as follows:
- Collision coverage – In case you’re involved in a traffic accident, collision coverage should help pay for damages to your vehicle.
- Comprehensive coverage – This kind of coverage pays for damage to your vehicle that was caused by anything other than a traffic collision. Some common examples where you may need comprehensive coverage include damage from a fallen tree branch or damage from extreme weather events like hail or flood.
- Personal Injury coverage – In case you’re injured as a result of a traffic accident while driving, this coverage should help you pay for any medical treatments.
- Liability coverage – If you’re involved in a car crash where you’ve caused property damage or injury to another person, this coverage should help you cover your liability to the other party.
- Uninsured motorist liability coverage – If you’re involved in a car crash caused by another driver who’s either uninsured or underinsured, this coverage will help you pay for car repairs or medical treatments you may need.
Be Firm And Transparent With Your Insurance Agent
Sometimes, an insurance agent may try and convince you to buy extra coverage on top of what’s essential. To avoid taking on more insurance premiums than you can afford, communicate your budgetary limits to your agent beforehand. Be firm and clear on what you can spend so that the agent refrains from upselling.
If you want to learn more about your auto insurance options or get a free quote, get in touch with our expert team of advisers here at Panorama.