Moneyadviceblog » Insurance » How To Choose The Perfect Auto Insurance For Your Needs

With so many auto insurance options, thanks to the insurance tech boom, you’re spoilt for car insurance choices. Here’s how you can choose the perfect car insurance that caters to all your needs in 2023 and beyond.

Why Do I Need Car Insurance?

The answer is quite simple. Driving without a valid insurance cover could land you in hot water legally. Also, having access to valid car insurance is like having an extra pair of safety airbags. Thousands are killed and millions more are injured every year from road accidents. Suppose you have insurance, and unfortunately, you meet with an accident that results in damages to life and property. If you have insurance, you don’t need to worry about the financial settlement for fixing the damages caused, or about the medical bills for you and others affected.

However, if you do not have active insurance, all these will be paid from your pocket. At times, when the accidents result in substantial damages, the bills required for settlement could be pretty high. You could land in serious trouble if you don’t have enough money. This is precisely why having car insurance is of utmost importance.


How Do I Choose the Best Car Insurance?

Before we see which insurance options are the best for you, let‘s take a look at the most common car insurance terms. Premium undoubtedly ranks as the number one factor!

So, what exactly is the term “insurance premium” all about? Insurance premiums are the cost of your insurance policy or the total money you give to the insurance company for a period of time (monthly/annual).

There are many determinants – the type and rate of coverage option you want, personal information like insurance history (if any), and special discounts from the insurance company. While the insurance premium is set after evaluating several determiners, these are often some of the key factors that ultimately decide the final insurance premium rate. Doing some research about the different insurance options available can help you save money and time. In a way, the best deals for cheap car insurance options are often a mix of many of these key factors bundled into the most affordable rates possible.

Types of Car Insurance

The first thing you should be doing to access the best insurance policy would be to go through the different insurance types. You‘ll soon get an idea of what insurance coverage you need and what you don’t. If your car is new, it‘s always best not to avoid anything and have all the possible coverages for at least the first year. For drivers with older cars or cars that have generally done more mileage, it would be best to shave off insurance policies like collision coverage and comprehensive coverage.

Liability Coverage

Apart from Virginia, all other states require a driver who hits the road to have Liability coverage. While most of the different insurance coverages can be removed from your insurance premium, you must have liability coverage regardless of how old your car is. Liability insurance protects you against any costs or damage you may inflict on other people and/or property in an accident. This also includes bodily harm and property damage to yourself and others involved in the accident.

Collision Coverage

As the name goes, a collision coverage insurance policy covers your car from all sorts of damages caused in the event of an accident due to your fault or the other driver‘s fault. However, it does not cover the other person‘s car damages or the medical expenses of anyone involved. The collision coverage option is also applicable to accidents caused by collisions with other vehicles or objects as well.


Comprehensive Coverage

Also called the OTC (Other Than Collision), insurance coverage protects your car from damage caused by anything other than a collision with a vehicle. Comprehensive coverage option covers the expenses in cases of car theft, natural events like tree uprootals, flood damage, other natural calamities, or windshield damages.

There are even more insurance coverage options, like underinsured and personal protection (PIP). Usually, when you buy a new car and get insurance options, you’ll find that bundled insurance policies are often cheaper than other policies. Bundled policies will have multiple coverages like liability, collision, comprehensive, underinsured, PIP, etc. together which makes it cheaper than buying them one by one. However, as you complete more kilometers, you‘ll realize that natural calamities and heavy accidents are not as common as you think. Slashing down both alone would save you a couple of hundred bucks from your annual expense.

Also, remember that the value of a vehicle decreases over time. For cars that are ten years or older, insurance coverage is often pretty minimal. There is no point in dragging anything other than liability coverage, as insurance policy benefits are meager. Eventually, it all comes to driving safely. Make sure you stay clear of accidents and fender benders that would require you to claim insurance. One more thing – analyze if the damages are worth filing a claim. Raising a claim for minor damages is unnecessary and puts a negative score on your overall insurance premium. Save it for more significant fixes instead, and shell out minor fender benders from your pocket instead. You can speak to experts like M&A Insurance Inc. for more details about insurance schemes, vendors, and insurance.