Buying car insurance for the first time should be an exciting time, not one full of drama and stress. It will be a smooth process only if you approach the task correctly. If you rush in like a bull, you will end up with a policy that is too expensive, does not cover what you need it to cover, or both.
Fortunately, you have come to the perfect spot to gain enough knowledge to get you through the process without pulling out any hair. Let’s jump right in and discuss 10 tips for first-time auto insurance buyers that will help you get through the process and end up with the coverage that is best for you.
1. Know Your Budget – A budget is a must if you want to have control over your finances. It will give you an accurate idea of how much you can afford when it comes to auto insurance. Remember that since it is your first time getting a policy, it will cost a little more than it usually would.
2. Know The Market – There are four main types of insurance policies that you need to know about. Each will have a use for you if they are needed.
- Compulsory Third Party (CTP) Insurance – This is the policy level required by law. It covers any injuries or death caused to third-party people.
- Third-Party Property – This will cover any expenses to the property, including vehicles, of the people in an accident in which you are at fault.
- Third Party, Fire, And Theft – This is a step above the previous one. It covers the property of the third parties involved. It also protects your car if a fire occurs or if a thief targets it for parts or a joyride.
- Comprehensive Car Insurance – This will cover all parties involved, including your own property. It will also protect against theft, fire, natural disasters, and acts of civil unrest.
3. Know What You Need – Now that you know the types of policies you can get, it is time to decide what you need. If you have an old car that is not valued very highly, it may be enough to keep CTP insurance. On the other hand, if you drive a luxury car, you will want comprehensive along with CTP. Use your judgment. Just make sure it covers what needs to be covered.
4. Know Your Credit Score – If you are unfamiliar with your credit score, it is time to get acquainted. Your credit score, and history, will be used in anything financial that you try to do, including car insurance. The higher the number and the more stable your past is, the better rates you will get on your policy.
5. Compare – Always go online to a platform that compares car insurance policies. They will give you some offers through their partner sites, so all you will have to do is go through them and pick the right one. Never automatically go for the cheapest one because it may not be the best. Always read the details of the policy before deciding to go with it.
6. Location Matters – The geographical location, your home address, will make a sizeable difference in your premium amounts. Basically, if you live in a high crime area, your rates will be more because your risk will be higher to the insurance carrier. If you live in a secure neighborhood with a lockable garage to park in, your rates will be less.
7. Check Additions – Most of the policies offered to you will be generic ones that cover everything you have listed on the application. This means that some things will be added to it that you may not want. Read through the offer and remove the things you do not need because there is no point in paying for something unnecessary.
8. Check Exclusions – You will also find some areas of the policy that list some exclusions. These will need to be adjusted if they negatively impact the auto coverage amounts you need.
9. Bundling – If you have any other types of insurance policies, such as home and contents, you need to discuss the option of bundling them together under one large umbrella policy. This will decrease not only the number of your premiums on your car insurance but also on your home and contents policy.
10. Deductibles – This is how much money you will have to pay if a claim is filed. You can increase this amount if you want to lower your premiums, but remember, it will be the amount that will have to come out of your own pocket. Be very careful when adjusting this number because it could come back to haunt you later down the road.
These top ten tips for first-time auto insurance buyers is the checklist you should use throughout the process. Luckily, because of the shift of business towards the use of online platforms, you can get your insurance policy from the comfort of your home. This makes it easy to take your time and ensure that you check everything you need to check and that the policy you end up with covers everything that it should.
