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What to Consider When Choosing Auto Insurance

Carrying a minimum amount of auto insurance is required by state laws, so you can’t legally drive without it. Yet while the minimum amount keeps your premiums lower, it can also put you at great risk if you have an accident. And after an accident is not the time to find out you’re underinsured.

When considering the amount and type of coverage you need, remember that numbers can be deceiving. For instance, carrying $100,000 of liability coverage may sound like a lot, and it is. But even that much likely won’t cover medical costs if you’re involved in an accident that causes serious injury, especially if multiple people are involved. When you consider medical bills, pain and suffering, lost wages, emotional distress, and residual pain and scarring, $100,000 doesn’t go very far. And without enough insurance, you would be required to pay the difference between your liability limits and actual costs of an accident.

The following are some important things to consider when shopping for auto insurance.

  • Cost isn’t everything. Don’t approach auto coverage like a commodity in which cost is the only factor. The amount you carry should be based on your lifestyle, earnings, how much and where you drive, your overall risk exposure, and other factors.

  • Personalize your search. We strongly suggest talking with an independent insurance agent about your personal risk exposure. This helps ensure you get the most appropriate coverage for your life and your budget, and it gives you a chance to ask an agent specific questions.

  • Physical damage vs. liability. Physical damage coverage helps pay for repairs to your car following an accident or loss. Comprehensive physical damage coverage goes even further by covering damage to your vehicle that does not result from a car accident, such as if a tree falls on it. Liability coverage pays medical bills and property damage you may be held responsible for if you cause an accident that injures another person or damages their property.

    When deciding which option is best for you, consider your budget, financial assets, and risk exposure and select the highest limits you can afford. This helps reduce your risk of having to pay for any costs above your limits in case of accident or liability.

  • Uninsured and underinsured coverage. Some states require drivers to have uninsured and underinsured motorist coverage to pay damages you are entitled to if damages exceed the at-fault driver’s limits. Even if it is not required where you live, adding it to your policy can maximize your protection for a relatively low cost.

Coverage Options

Understanding different policy options can help you get the best combination of coverage, value, and cost. The following are a few common, and valuable, options to consider.

  • Loan/lease gap coverage. With this optional coverage, if the unpaid loan or lease amount exceeds the value of your car after an accident, your insurance policy will help cover the unpaid amount on the loan or lease minus what your car is actually worth today. If you were in an accident without this coverage, you would be responsible for the difference between the actual cash value and the unpaid loan balance.

  • New car replacement. If you have a new car, you may not have enough coverage to get an equivalent vehicle if your new car is totaled. New car replacement coverage will pay either the purchase price to replace the vehicle, the cost of a similar new vehicle, or the market value of the vehicle.

  • Roadside assistance and emergency expenses. Having roadside assistance and emergency expense coverages ensures you can get a tow truck, battery jump-start, tire changes, or even labor should your car break down. Emergency assistance can cover transportation, lodging, and personal property coverage. Much better than being stuck on the side of the road!

  • Pet coverage. We understand that pets are family, too. Pet coverage will help pay for the veterinary expenses if your dog or cat is injured or killed in a collision.

Ask About Discounts

When talking with an independent agent or comparing insurance companies, be sure to ask about discounts. Some ways to save on your premiums include:

  • Maintain a safe driving record. Installing a device or app that tracks your miles, driving behavior, and the time of day you drive can all demonstrate that you are a safe driver and could result in a noticeable discount.

  • Own a home. You’ll save on premiums if you own your house.

  • Package your policies. You can get a discount when you bundle your home, auto, boat, motorcycle, or other policies with a single insurance company. Having just one bill is more convenient too.

  • Paid in full billing. By paying your bill at the start or renewal of the policy rather than monthly, you can reduce your premiums.

To learn more about getting the right coverage for your needs, give us a call today!

Reposted with permission from the original author, Safeco Insurance.


Lyla Peterson

Monday, June 29, 2020 at 11:24pm EDT

It’s great that you can add roadside assistance services to your policy so that you can get help if you ever break down. I am moving to a new state next month, so I won’t have any family or friends around to help me if something bad happens on the road. Roadside assistance is definitely something I will consider when choosing an insurance policy.

Michaela Hemsley

Friday, September 11, 2020 at 4:26pm EDT

My husband and I are thinking about buying a new car soon because we think it would help save us time and help us not have to take public transit everywhere. Thanks for mentioning that we should talk to an independent agent about car insurance so we can get a policy that best fits our life and budget. I think that would also help make sure that we knew what our options are as well as what we needed to look for, so we’ll have to find one that can help us.

Taylor Hansen

Tuesday, October 27, 2020 at 1:15pm EDT

I’m wanting to buy a new car next month so I can drive to work and I’m worried about the insurance rate rising. I like how you mentioned finding an independent agent for car insurance to get the best policy for my lifestyle. It seems I should find out different options to find the best one to help me out.

Penelope Smith

Monday, November 2, 2020 at 10:31pm EST

This is some really good information about getting car insurance. I like that you pointed out that it would be better to maintain driving records. That is good for me to understand because I want to get my first car this winter. It does seem like I should get an expert to help me find good insurance.

Robert S.

Friday, November 6, 2020 at 11:57am EST

I definitely agree with the idea that cost isn’t everything when it comes to auto insurance. You have to look at everything a plan comes from and determine whether it’s worthwhile, especially if a plan has bells and whistles that may not be relevant.

Zoe Campos

Tuesday, November 10, 2020 at 9:54am EST

When you said that car insurance should be based on my lifestyle and overall risk exposure, I thought about my driving schedules. They’re not frequent at all and I’m only planning to use my vehicle every weekend to run some errands. Maybe I should emphasize this to insurance providers before getting a possible quote.

Thomas Clarence

Tuesday, November 10, 2020 at 6:12pm EST

I appreciate you helping me to understand that the lifestyle you have will affect the amount of auto insurance you should carry. It seems like younger adults and teenagers would have to pay more money on car insurance because they are more likely to get into accidents. It would probably be a good idea to practice safe driving habits so that you can have cheaper insurance.

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Thursday, March 18, 2021 at 12:17pm EDT

It’s very interesting to learn about the dynamics of what to consider when choosing the right auto insurance. All 12 of the points were well founded and brought an easy understanding to read and comprehend. Thank you!

Charlotte Fleet

Monday, March 29, 2021 at 2:10pm EDT

Thanks for your tip to personalize your search for an insurance company. My husband and I need auto insurance. We will have to keep our search personalized to find a good one.

Erika Brady

Thursday, May 27, 2021 at 3:31pm EDT

This summer, my nephew is going to start learning how to drive. Thanks for explaining the different auto insurance options and that my sister shouldn’t focus on just the cost when choosing coverage. Maybe she can look online to research auto insurance companies and find one that can keep her son properly covered.

Shammy P.

Thursday, May 27, 2021 at 9:11pm EDT

I never knew that you can actually save on premiums if you own your house and if you can demonstrate that you are a safe driver. This is something that I will share with my father since I heard that he is planning to shop for an auto insurance policy for his new car. He wanted to find ways to reduce his premiums since his monthly budget is limited. He owns 3 properties, and it might be a good idea for him to shop for discounts.

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