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7 Basic Things to Know About Auto Insurance

Getting your driver’s license or a new car can be a very exciting experience. It’s a mark of a new beginning and a sign of independence and stability. However, with this new step in your life comes several responsibilities. You have to always be prepared for the possibility of getting into any kind of road accident while driving. That’s why the first thing you should do when you get a new car is to get auto insurance. If you’re a new car owner, here are the basic things to know about auto insurance.

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  1. The Types

Before getting into the vast world of auto insurance, you should get acquainted with all the types available out there to know what would be best for you. There is mandatory auto insurance coverage that covers all costs associated with injury, death, as well as reimbursement for any damage to the car. Then there’s an optional coverage, which has several types: liability, collision, comprehensive, personal injury protection, and uninsured and underinsured motorist coverage.

  1. What’s Covered

Each type of insurance covers something different. As explained by the people at BeaconPoint.co, you can get a package that includes multiple types of coverage that suit all your needs. For example, comprehensive coverage is for unexpected damage that occurs to your vehicle, while liability coverage pays for any damages or injuries you cause to other vehicles or drivers.  Collision coverage, on the other hand, pays for your injuries and car damages in case of an accident, while uninsured motorist coverage protects you in case the other party in an accident doesn’t have liability coverage. There’s also underinsured motorist coverage, which comes into play when the other party’s coverage is not enough to compensate you for your damages or injuries.

  1. What’s Not Covered

It’s also important to know what your insurance will not cover to prepare for handling it yourself. While every company has its own coverage policy, most cover accidents or theft, but there are certain occurrences that aren’t covered. For example, if someone who is not listed in your policy was driving the car when the accident occurred, the company won’t cover the damage. You will also have a certain limit to your coverage that when exceeded, you’ll have to pay the difference yourself. Most companies also don’t cover vehicles used for business.

  1. How Insurance Rates are Set

There are a few things taken into consideration by auto insurance companies when they are putting together a policy. Each company will have its criteria, of course, but there are a few basic, common factors. They include the model of the car, your driving records, your age, gender, and marital status. Where you live can also come into play in case you reside somewhere with high crime rates. Another factor taken to count is your credit score; the higher, the better.

  1. You Car Type Matters

Many people think the more expensive the car, the more it costs for it to be insured. However, while the car model matters, it’s not about its cost. If you have a car that has all the safety precautions, your company won’t have to pay as much for repairs, not to mention you’ll be less of a risk anyway. The age of the car also plays a part in the insurance policy, an older car would be more expensive to repair. Adding anti-theft devices to your car can also benefit your insurance package.

  1. Get the Right Add-ons

Many insurance companies have an add-ons option for their policies. It’s important to choose the add-ons that will benefit you without raising the price. If it’s a new car you’re trying to insure, you’ll be offered many options like NCB protector, return to invoice cover, emergency roadside assistance cover, engine protection, and more. Each add-on has its own price, and they can make a big difference in the final price of your policy, so do your research on what your car needs.

  1. How to Get the Best Price

Getting an auto insurance package is an important purchase, but it can be expensive. The best way to ensure you’re getting the best insurance rate is by comparing company rates. You can also look for companies that offer discounts for having a good driving record, anti-theft precautions, or safe car features. The most important thing is not to try to save money when it comes to important details like the policy’s legally-required liability portion.

 

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There you have it! These are all the basic things you need to know about auto insurance before venturing into the quest of finding the best coverage for you. Remember to research anything you feel that you don’t know enough about. At the end of the day, you’ll want to make sure that you can choose the best auto insurance package that will protect you, your family, and your vehicle from any injuries or damages should you ever get into an accident.

About the author

Alice Instone-Brewer

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