• About Us |
  • Follow Us: 
theinsurance411.com logo

The Insurance 411

What you need to know about insurance

  • Homeowners Insurance
  • Auto Insurance
  • Life & Health Insurance
    • All Life & Health Topics
    • Affordable Care Act (ACA)
    • Group Disability Insurance
    • HSAs
    • Life insurance
    • Long Term Care Insurance
  • Personal Insurance Basics
  • Specialized Personal Policies
    • All Specialized Personal Policy Topics
    • Boat Insurance
    • Motorcycle Insurance
    • Travel Insurance
    • Umbrella Insurance
  • Essential Property and Liability Insurance
    • All Property & Liability Topics
    • Business Income Insurance
    • General and Auto Liability
  • Specialized Insurance Policies
    • All Specialized Prop & Liability Topics
    • Credit Risk
    • Cyber Insurance
    • Directors & Officers
    • Employment Practices Liability
    • Environmental Liability
    • Professional Liability
    • Surety
    • The Basics
  • Workers’ Compensation Insurance
    • All Workers’ Comp Topics
    • Claims Management
    • Controlling Costs
    • Loss Prevention
    • Regulations
    • The WC Basics
  • Employee Benefits
    • All Employee Benefit Topics
    • Affordable Care Act – “ObamaCare”
    • Benefits Management & Compliance
    • COBRA
    • Dental Insurance
    • Group Disability Insurance
    • Retirement Plans
    • Vision Plans
    • Voluntary Benefits
Top Personal 411 Stories
  • | Ten Tips to Make You a Better Healthcare Consumer
  • | Life Insurance 101: What Happens When a Policy Matures?
  • | Increased Construction Costs and Homeowners Insurance
  • | How to Protect Yourself from Social Media Liability
  • | End-of-Life Planning

Five Practical Tips for Buying the Right Car Insurance at the Right Price

October 11, 2017 by Leave a Comment

If you need insurance for a new car or you’ve been routinely renewing your car insurance with the same coverage and limits every year, it makes sense to evaluate your options before buying auto insuranceor renewing. Here are five practical tips:

1.          When a car is new, you will likely want collision and comprehensive coverage. You’ve made an expensive investment and you want to protect your asset. Not only that but if the car is financed, the lender will require you to insure it. But a few years later, after the loan has been paid off and the car’s resale value has substantially diminished, you may want to compare the cost of collision insurance to the Blue Book value of the car. The closer those numbers get, the more it might make sense to “self-insure” your car for collision. Comprehensive coverage, however, such as loss from fire, flood and theft, usually costs much less than collision and you may well decide to keep that coverage for many more years.

2.          How many miles do you drive each year? Do you drive to and from work or just for pleasure and convenience? If you only drive a few thousand miles per year, you may want to look into a mileage-based insurance plan. That could save you money.
3.          Think about the insurance implications of the model of the car you own or will be buying. Obviously if saving on insurance is a big consideration, don’t buy an expensive car with a big engine, like a Maserati. That’s a broad generalization though. To find out which cars probably cost less to insure (and are safer to drive), check out the “Insurance Losses by Make and Model” data published by the Highway Loss Data Institute of the Insurance Institute of Highway Safety: http://www.iihs.org/iihs/topics/insurance-loss-information

The Mini Cooper Roadster Convertible, for example, has one of the lowest overall collision loss histories. The BMW M6 has one of the worst. Unfortunately, because it takes several years to compile accurate loss data, only information about model years 2005 and older is available. But you can assume that a model’s past loss record is a likely predictor of its future losses — and that insurance companies also make this assumption when calculating auto insurance rates.

4.          The other tips in this article discuss how you might be able to save money up front. This tip, though, could possibly save you money in the long run. Lots of money. Here’s how:

Nearly every state mandates minimum levels of auto liability coverage. Typical limits are $15,000 per person and $30,000 per accident and $5,000 for physical damage ($15,000/$30,000/$5,000). True, many states have mandated higher limits the last few years, such as $25,000/$50,000/$25,000. These, however, are still not necessarily very high limits depending on the nature of the injuries and the kinds of automobiles involved in an accident.

Should you buy only the minimum limits? Not if your net worth is greater than the minimum limits and not if, in the event of an accident, you don’t want to be held personally responsible for paying the difference between the total amount you are liable for and the limits of your insurance policy. In addition to purchasing higher auto limits, such as $100,000/$250,000/$100,000, many people also purchase umbrella policies that ride on top of these lower limits and provide additional limits of $1 million and more.

5.          Consider how high a deductible you can absorb. If you have good cash flow or a nice rainy day savings fund, you may be able to handle a large deductible. Here’s an example: If you can save $260 a year by raising your collision deductible by $500 (from, say $500 to $1,000) and you don’t think you’ll have an accident more than once every three years, it makes economic sense to take the higher deductible. Otherwise you are trading 3 X $260 = $780 for the insurance company’s $500.

 

Let us review your auto insurance policies. We’ll ensure you have the coverage you need and may save you money.

 

Filed Under: Auto Insurance Information   •  Personal Lines

[wp_ad_camp_3]

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Read more ⤵

  • Business Insurance
  • Personal Insurance
  • Newest Personal Articles
  • All Personal Topics
  • Recommended Articles
    • Despite Its Low Cost, Most Consumers Don’t Buy Cyber Risk Insurance
    • Quick Guide to Renters Insurance
    • Not Your Granddad’s Life Insurance Policy
    • Car Insurance Policy Basics

Most Popular

  • Obesity and Life Insurance: Extra Pounds May Cost You More
  • 4 Ways To Use Life Insurance for Charitable Giving
  • Critical Illness Insurance Insures More than Just Your Health!
  • How To Protect Yourself from Dog Bite Liability Claims

Attention Insurance Agents

If you are looking for quality insurance content for your own customized newsletter, please visit Smarts Publishing:
https://smartspublishing.com

Business Insurance 411

  • Essential Property and Liability
  • Specialized Policies
  • Workers’ Compensation
  • Employee Benefits

Personal Insurance 411

  • Homeowners Insurance
  • Auto Insurance
  • Life & Health Insurance
  • Personal Insurance Basics

Read More

  • Business 411 Articles
  • Personal 411 Articles
  • Top Stories Business
  • Top Stories Personal

The Daily Blog

  • Newest Business Articles
  • Newest Personal Articles
  • Most Popular Business
  • Most Popular Personal

Copyright ©2019 TheInsurance411.com

  • Home
  • Terms of Use
  • Privacy Policy
  • About Us
  • Contact Us