How Much Car Insurance To Buy

With so many choices currently available in the car insurance market, it can be quite difficult to know which products to choose. Understanding some basic facts about the insurance market can help you to make informed decisions. Following are five facts that you need to know about the car insurance market.

1) Premium Plan - Is it worthwhile? It is now possible to purchase a deluxe insurance package that includes new car replacement and accident forgiveness among other services. You will pay heavily for these add-ons, so be sure that you understand exactly what you are getting. You may be able to get similar benefits without purchasing the premium insurance.

2) Shared Market versus Nonstandard Market - Drivers with below average driving records should shop extremely carefully for car insurance. Shared market insurance companies are regular insurance companies that share the risk of poor drivers. Consequently, their rates are rather high. A new entrant to the car insurance business is the Nonstandard market. This market consists of a series of specialty companies that exist solely to insure nonstandard drivers and competition keeps their rates somewhat lower.

Car Insurance To Buy

3) Downtown is the most expensive - As you may already know, car insurance rates are always higher in cities than they are in small towns and suburbs. What you may not know, however, is that even within a city your zip code matters. Simply choosing a home in a more residential portion of the city rather than downtown may save you hundreds of pounds.
4) Purchasing car insurance is a numbers game - It is entirely possible that you will pay for car insurance for years and never need to use the policy. However, it is equally possible that you will need your insurance as soon as you drive off the lot. You cannot predict all things that could theoretically happen to your vehicle. Hence the necessity of playing the numbers game. Look over your budget and think through what would happen if you had an accident. Also determine how much you can realistically spend each month. Then shop around to get the best insurance for the money you can afford to spend. Be sure to consider varying deductibles.

There are so many options available in today’s car insurance market that it would be quite time consuming if not utterly impossible to make the “perfect” choice. However, understanding the market and the variables over which you have control will assist you in making a smart decision. Take the time to consider your options and you will find car insurance that works well for you.

Tips To Buy Car Insurance

  • Check out your state's minimum insurance requirements. It's possible that the minimum coverage required might not be that different than what you really need.
  • When deciding how much coverage you need, make sure you're covered for an amount equal to the total value of your assets.
  • To keep premiums low, choose collision coverage with a high deductible, and plan to pay routine repair costs with your own money.
Types of Auto Insurance Coverage

You probably don’t need to spend a lot of money on a Personal Injury Protection policy. You should be covered if you have health insurance and disability insurance through your employer. Just buy the required minimum.

You do need to make sure you have adequate coverage against uninsured and under-insured drivers. It’s relatively inexpensive in most states (something like $40 a year for $100,000 worth of coverage) and if you are in a collision with an uninsured driver, will help cover costs your health insurance won’t. If you’ve decided to carry BIL for $100,000/$300,000, do the same for yourself.

Collision and comprehensive coverage is worth having if you would want to repair or replace your car after an accident. These policies have a deductible (the amount you have to pay out-of-pocket before coverage kicks in), and they pay out based on the current value of your car, not what you paid for it.

Choose the highest deductible you can afford, because a higher deductible will significantly lower your premium. You’re seeking coverage for major damages to your car, not for every little thing that can go wrong. It’s better to spend $500 of your own money on minor repairs every so often than pay an extra $50 a month whether you need repairs or not. Save collision insurance for when you have car repairs that cost thousands, not hundreds. Remember, if you submit a claim for every little thing, your premium will increase.

A handful of states require car owners to carry no-fault insurance, policies that pay out no matter which driver is at fault in an accident and limit your ability to sue other drivers.

Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah and Puerto Rico requires car owners to carry this protection, though the rules around how these policies work vary by state. These policies tend to be expensive, so be sure to shop around for the best deal if you live in a no-fault state.
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What Level Of Car Insurance Do You Need?

car insurance quotes

The level of car insurance that someone might need depends on the financial circumstances of the individual concerned and the cost of the car involved. Take for example someone who has a brand new £50,000 motor, it would be sheer folly to do anything other than take out one of the best car insurance policies available and the cost of the car insurance is likely to be insignificant when considering the overall annual cost of the car.

However, if you have a car that is nearing the end of its life, have a low cost car and previous claims or are a new driver then the cost of the car insurance versus the benefits you might receive need to be given greater consideration. Comprehensive car insurance premiums are likely to be disproportionately high for older vehicles, new drivers with low cost cars or drivers with accident history.

Whatever your circumstances you are legally obliged to take out a basic level of car insurance that will cover you against third party claims and given the level of damages awarded seem to be increasing out of control then my advice would be to get the best possible third party liability auto insurance cover that you can afford.

The legal requirements for auto insurance does vary from state to state so you’ll need to clarify the level of cover you require when taking out auto insurance but only insuring to the legal minimum isn’t necessarily the best choice to make.

If you have a lot of money sunk into your car or your auto is leased then you really should take out comprehensive and collision auto insurance to cover you for things such as fire, theft, acts of god or collisions that are your own fault.

If you live in an area where cars are regularly vandalised you might want to consider comprehensive auto insurance when perhaps you wouldn’t have otherwise done so. The cost of your auto insurance will generally be higher if you live in such an area but that is something you have to weigh up against the cost of repair.

Personal Injury Protection is something that everyone should consider as this element of your auto insurance will cover medical costs associated.

Despite legal requirements some people still persist in driving around without auto insurance leaving the others with a need to insure against the uninsured motorist. Uninsured auto insurance will cover you for damages in the event of an accident with an uninsured motorist. Again, insurance that everyone should give serious consideration to given an auto accident could leave you unable to work or your family without any means to earn.

If you want a more comprehensive auto insurance policy but want to limit the cost then you could look at opting for a higher level of deductibles. Deductibles are the amount you would have to pay before you could make a claim against your auto insurance policy and generally, the higher level you agree to the lower your auto insurance premiums.

Before you purchase any type of auto insurance coverage, be sure to study your other insurance policies so you don't end up paying for something you don't need. If you have a decent health insurance plan, you might get away with purchasing the bare minimum personal injury protection coverage — or none at all if your state doesn't require it. However, you might end up paying a co-pay and deductible that wouldn't apply if you have PIP or MedPay.

Uninsured or underinsured motorist coverage also might be a wise buy, even if you have full medical coverage, since it can pay for your pain and suffering damages. If you're offered roadside assistance coverage by your insurer, you might not need it if you already belong to an organization such as AAA that offers it. The same thing applies for mechanical breakdown insurance. If you own a newly financed or leased vehicle that's still covered under warranty, such coverage is unnecessary.

It's easy to resent having to spend money on insurance. But keep in mind that auto insurance will most likely come to your rescue at some point, so it's imperative to purchase a worthwhile policy. Know what coverage you must have and know what additional coverage fits your lifestyle. Then if trouble strikes, you'll be ready.

Additional Types of Auto Insurance Coverage

In addition to liability insurance―which is usually mandatory―you might also consider the following optional coverage types:
Collision coverage, which covers damage to your vehicle if your vehicle hits another car or object.
Comprehensive coverage, which covers damage to your vehicle due to non collision-related incidents like theft, vandalism, natural disasters, and weather conditions.
Uninsured or underinsured motorist coverage, which covers you in the event of an accident with an uninsured―or insufficiently insured―driver.

Personal injury protection (PIP), which covers any medical expenses not covered by the other driver’s liability insurance policy. PIP is also referred to as no-fault insurance, and is required in several states.
Typically speaking, you will want to consider these types of coverage if you drive an expensive vehicle, if you live a highly populated area, or if you often commute in heavy traffic. On the other hand, if you live in a rural area, or if your vehicle is fairly inexpensive, you will likely not require these types of coverage.

How Much Car Insurance to Buy

Remember, you need to at least meet the minimum car insurance requirements for your state. Most often, you’re required to have certain amounts of liability insurance (and sometimes personal injury protection (PIP), or no-fault insurance).
However, it’s a good idea to purchase higher limits and more coverages than what is required. Base your decision on:
Your personal assets. The more valuable your assets, the more protection you need. For example, if you didn’t have very high limits and got into an accident, the other driver could sue you for damages your policy won’t cover. Your assets, such as your house, could be in danger.
Your budget. While insurance agents often recommend certain limits, you should only buy what you can reasonably afford. If you can’t pay your premium, you risk nonpayment of premium, which can lead to cancellation and lapse of coverage.
How much risk you can handle. If you feel you can pay a lot of out pocket in the even of a claim, you may be fine with higher deductibles and/or lower limits.
Your vehicle. If you have a new or very valuable car, you’ll probably want comprehensive coverage. You may even be required to have collision and comprehensive by your lienholder. However, if your vehicle is not worth much, the cost of comprehensive coverage may not be worth it.

How Much Is Car Insurance?

Many drivers ask, 'how much is car insurance a month?' There is really no way to answer this until you have a set policy. The cost of a car insurance policy can vary greatly, based on your company, your driving record, other rating factors, and the coverage types and limits you choose.
Your best bet for finding cheap car insurance is to compare multiple quotes and ask any insurance companies you’re interested in purchasing from about discounts that may apply to you.

How Much Is Insurance for a New Driver?

This will also vary by insurance companies, but you can expect to pay more if you’re a teen or new driver. Because you have less experience, you’re considered higher-risk on the road and therefore more likely to file a claim. The insurance company will offset this risk by charging you higher rates.
If you’re the parent of a teen driver, you can add your teen to policy to save some money; however, you will most likely see a rise in your premium.