Car insurance can be one of the first major adult obligations that many are unprepared to handle, leaving many feeling overwhelmed and uncertain as they search for coverage at an affordable cost. Choosing an appropriate policy and policyholders may find confusing or intimidating at first.
As well as being expensive, purchasing your first home can also be expensive – here are a few tips for first-time buyers: 1. Do Your Research.
1. Shop Around
Finding affordable car insurance doesn’t need to be a difficult endeavor; according to ValuePenguin, most people who shop around found that it took less than an hour to compare quotes from insurers and select a policy that meets their needs. While various factors impact insurance rates, shopping around remains one of the key ones.
A clean driving record and no DUI/major accidents will help lower your rates, while DUI’s or major accidents will dramatically increase them. Your credit score also plays a major role, so improving it can result in reduced premium costs.
One factor that could significantly alter your rate is the vehicle you drive. If it depreciates quickly, this could end up costing more in terms of coverage over time – this is why it is wise to shop around when purchasing either new or pre-owned automobiles.
As well as shopping around for insurance policies, it’s also wise to periodically evaluate your rate. Doing this can ensure you are getting the most affordable policy and meeting all of your needs – this may involve reviewing coverage levels and making adjustments as needed, such as adding comprehensive or collision coverage in order to protect the value of your car, raising your deductible (but only if this can be accommodated), bundling auto and home policies for additional savings, etc.
2. Read Your Policy
Understanding an insurance policy might not seem like the perfect afternoon read, and its language may seem complex at first. But understanding your policy could save you future headaches from paying too much or not receiving enough coverage.
Your policy is a legal contract between yourself and your insurer that should clearly outline all terms and conditions of the agreement. The main sections include declarations page, insuring agreement, and policy conditions – whether purchasing your first policy or renewing one it’s important to carefully read through every section.
Declarations pages (also referred to as dec pages) provide an overview of all of the information included in your contract, such as your name and policy number, term length, coverage types offered (limits/deductibles/premiums etc) discounts available as well as changes that need to be made (such as adding/removing vehicles etc). Should changes to your policy (like adding or subtracting vehicles etc) take place then new dec pages should reflect these modifications.
Once you understand your policy, you can use it to inform your car-buying decisions. For instance, you could learn more about why comprehensive auto coverage is important and discover ways to cut costs by dropping coverage that you don’t require.
3. Take Advantage of Discounts
Take full advantage of any discounts you qualify for when searching for car insurance – these could save you considerable sums of money! Discounts can differ by insurer and state; be sure to inquire with an agent as some may have time-sensitive terms attached, so don’t wait too long before asking!
Some insurers provide discounts to students with a certain GPA; others offer loyalty discounts when drivers renew with them; yet still others give discounts to individuals who sign up for electronic billing or document management options; while still others will reduce costs by agreeing to automatic payments from your bank account.
Other discounts depend on driving habits and lifestyle factors, with insurers looking at your driving frequency and safety as they determine discounts. For instance, allowing your insurer to monitor your driving through a telematic device could qualify you for usage-based discounts like Allstate Drivewise; mass transit commuters or those covering less miles each year could also receive savings.
Anti-lock brakes, air bags and passive restraint systems can also help lower premium costs, while parking your vehicle in a garage or secured lot instead of leaving it out in public could lower theft and vandalism risks significantly.
4. Drive Safely
Many car insurance companies provide discounts to drivers who demonstrate responsible driving practices, providing them with incentives and rewards to save money over time. Safe driving habits should not only benefit yourself and other road users but also reduce the likelihood of accidents which require costly repairs and increase rates.
Distracted driving increases your risk of an accident and can damage to your vehicle, so it is best to refrain from engaging in activities that could distract you, such as talking on the phone, eating or fiddling with the radio. Driving while distracted can also result in expensive traffic violations or penalties from law enforcement authorities.
Age can play an enormous role in car insurance rates, as younger drivers tend to be at greater risk for accidents than their elder counterparts. Furthermore, young drivers often don’t have an established credit history which contributes to higher premiums. To cut costs down further for new buyers it is vitally important that they shop around to find the most cost-effective policies as soon as they purchase a vehicle and consider safety record and total cost of ownership when selecting make and model combinations.
For long commutes, consider investing in a smaller and more fuel-efficient vehicle. Check the Insurance Institute for Highway Safety’s Top Safety Pick lists to identify vehicles which have undergone rigorous safety testing and feature outstanding features.