Not all car insurance is the same, so it is useful to educate yourself as to the different coverage options available to you. If you are already insured, it is still usually worthwhile to shop around before you renew.
Understanding the options
Your state will have minimum requirements for the amount of coverage you have to buy, and additional coverage is optional. Examples of the types of coverage you be required or may choose to carry include liability insurance, which pays for damages to others in an accident, coverage for medical expenses for you and your passengers, coverage in case you are in an accident with an uninsured or underinsured motorist, and collision and comprehensive insurance.
Balancing cost and coverage
Once you understand the minimum requirements, you will need to take into account your budget and your appetite for risk. A policy with a higher deductible can look good on paper because it means your premiums are lower, but can you afford it? Will you be able to pay the out-of-pocket price for repairs if necessary? Would you be able to put off a fix, or do you rely on a vehicle to get to work? Be sure that your desire to save money in the short term does not create problems for you in the long term.
Ask about discounts
Many auto insurance companies offer discounts for various factors including a good driving record, the safety features on your vehicle and even things such as your age, sex and where you live. A policy might also be cheaper if you bundle it with your homeowner’s policy. However, this is not always the case even if it has been in the past, so you should still review your options each time your policy is up for renewal.
Some policies may offer extras such as auto roadside assistance, which can provide mechanic services wherever you break down, or rental reimbursement if your car is in the shop after an accident. These may be worth it to you in certain circumstances, such as if you spend a lot of time on the road in areas where it would be difficult to get help or if you know you could not manage without your car for even a day or two.
Shopping for auto insurance may not sound like fun, and you might be tempted just to renew your usual policy and avoid all that legwork. However, the reward may be significant savings and better coverage.