Car insurance procedures are known to be lengthy, time-consuming and confusing. Whether you are applying for car insurance for the first time or you have done it before, one thing about the process should never change i.e. asking questions.
There are many aspects of a car insurance plan that you might not understand. While doing independent research is helpful, it’s always a good idea to get your facts straight from the source. In this case, you can and should ask your car insurance company a number of different questions.
Since it is all too easy to forget about an important area, we’ve made a list of some important things that you should ask when buying a car insurance plan.
1. What Kind of Coverage is Needed?
While you may not require full coverage, most car insurance plans offer state-mandated car insurance coverage, such as liability insurance. This is needed for fatal car accidents that cause damage to the vehicle and can result in an injury or loss of life. Another important coverage is the uninsured motorist protection. This is needed when someone who is uninsured has an accident with your car.
Apart from these coverage plans, you can also get the following coverage:
- Collision – This is used for coverage of repairs in accidents, regardless of the party at fault.
- Comprehensive – This is needed for coverage of accidents and incidents that are not related to driving. Vandalism, fire, theft or other acts of nature fall into this category.
- Personal Injury – This coverage is used to help pay loss of wages, medical expenses or other injuries that could decline the quality of your life.
While all these coverage plans might seem necessary, they can pump up your deductible and affect your annual premium charges too. Additionally, you don’t need them all. Collision coverage is only beneficial if you have a new car.
For example: If your old car costs around $3,000 and the coverage premium is $200 per year with a deductible of $1,000, you’re not getting much benefit here. However, if you have a car valued at $30,000 in the same scenario, you’re saving a lot more money. The same is applied for comprehensive coverage plans.
2. What Affects Your Risk Assessment Score?
Before obtaining car insurance, the car insurance company will run a risk assessment score. This is done to not only get your credit score, driving record and more, they also base the premium of your plan on this. The higher the risk is, the higher the premium will be and vice versa. While it is a given that a bad driving record with a DUI and accidents will give you a bad score, some factors may be outside your control, such as your age. Teens and the elderly are considered bad drivers and may face higher premiums.
Other factors include the locality you live in and your credit score. If you live in an area where there is a higher chance of your car getting stolen, it is possible that your risk will be higher in the assessment. Always try to find out if there is something you can do to bring down your score in other areas.
For example: You can improve your credit score by paying off debt and being punctual with repayments. For a bad driving record, it is possible to take a driving course that can positively impact your score.
For more information to figure out how your auto insurance rates are determined check out: How Are Insurance Premiums Calculated?
3. Who is Covered in Your Policy?
Never assume that your car insurance plan will cover the whole family. That’s a dangerous assumption to make. You should always discuss gray areas with your chosen company. In most cases, coverage is usually extended to family members as long as their names are included in the plan. However, just to be sure, discuss it with your car insurance plan provider to remove any ambiguity. In this manner, you will know for sure if your family members will be covered with the insurance plan as well.
However, it’s important to consider different scenarios. For example, if your friend chose to use your car and had an accident in it, will your insurance kick in or your friend’s? Additionally, make sure that the insurance plan also covers these gray areas. What will happen if you are in a rental car and you face an accident or some other car damages? Asking these beforehand can be the best option since otherwise, you could face a bigger risk. It can also save you from having to face extra costs or distress when you find out that your insurance plan doesn’t cover a certain incident.
4. How High are the Deductibles?
A deductible is usually the amount you pay for repairs in a car accident, before your insurance cost kicks in. Now, not all insurance plan deductibles are of the same amount. Some companies could require around $1,500, whereas others could ask you to pay only $100. The deductible amount is based on how much premium you are paying. The higher the premium, the lower your deductible will be, whereas the higher your deductibles are, the lower the premium will be. It is very rare that both the premium and deductible amounts are high but for sports cars or other fancy cars, this might be the case.
In many cases, it is possible to bring down the cost of the premium with a higher deductible. While it can help you save more, make sure that this is something that you can financially support. It might be fine to save $200 but if you are in a car accident, you will have to cough up $1,500 of your own money before the insurance coverage kicks in. Asking your car insurance company about the deductibles that they are offering you will play a bigger role in your decision to using this plan for reducing your premium.
5. Are there any Discounts?
Here’s a tip, discounts are always available but at times, it is a good idea to ask which premiums and plans allow you to enjoy bigger discounts. Additionally, some car features, such as anti-theft devices also offer discounts. Features like airbags and car alarms can also enable you to get a discount. A pristine driving record will make a difference here. Never assume that your insurer will automatically give you the discount you qualify for. Sometimes, they are too busy or they might forget to add it to your account. If you ask them, it will stand out more and they will note it down properly as well.
You can ask them for the ones you can also earn. You’ll be surprised how many things can help you get a discount. From having a hybrid car to parking regularly in a garage, different insurance companies prioritize different things. Even your work profession and the company you are working with could help you get some discounts. While it might not seem like much, these discounts do add up and you will see that you are saving a lot more on your car insurance plan than you might have initially thought. However, remember, you will have to ask for them first.
For more information about auto insurance discounts check out: 8 Auto Insurance Discounts Worth Asking About in Connecticut.
6. What Payment Options are Available?
Car insurance payments can differ; therefore pick a plan that matches your budget. Some companies are more flexible than others. Instead of requiring you to pay an annual lump sum, you can opt for monthly payments. Additionally, you can also get car insurance that supports quarterly payments or payments that are made every six months. It is always best to discuss with your car insurance provider the payment options and plans they have available and which works best for you.
Keep in mind, the companies that require you to make monthly payments might also add a surcharge fee. Furthermore, some companies that offer annual payments might offer you bigger discounts. Look at the incentives and ask questions about any additional payments that are being applied to a certain payment option. While monthly plans are usually feasible, if the surcharge fees are added to it, you could be spending more instead of saving through this mode. It might seem difficult, but you can work out a payment mode that works best for all parties involved by discussing all options with your car insurance provider beforehand.
7. How is the Car Valued?
When seeking car insurance, the value of your car will definitely have an impact on the premium and plan that you will be getting. It’s a given that fancy cars, sports cars and antique cars have higher insurance plans. This can often be too expensive so don’t be too quick about getting a sports car. Additionally, make sure that you don’t have a car that is very old and worn out. This may surprise you, but it is possible to have a car that is uninsurable.
Always make sure to discuss this with a car insurance company before. One of your primary goals should be to get a reasonable insurance plan, which matches your car and your budget perfectly. Also, keep in mind that some companies may have different criteria for car valuation. Your reasonable SUV might not appear expensive to you but if it is a top-of-the-line model, you could end up having to face higher premiums. A good idea is to ask the company about their valuation mode. They might also have other useful information to share regarding how they go about it.
8. What Parts Are Covered in the Repairs?
In the event your car gets stuck in snow, you need to have a snow shovel and extra floor mats in your car. You should learn how the shovel snow properly from around your car if it gets stuckThis is an important question to consider and one that most car owners never bother asking car insurance companies. Car parts are expensive and can differ, so be sure to ask your car insurance provider if they will be paying for Original Equipment Manufacturer Parts (OEM) or if they will only cover aftermarket parts. OEM parts are usually more expensive since they are not only identical but come straight from the manufacturers. While they might cost more, they are usually durable and guarantee quality. With aftermarket parts, there isn’t such a high guarantee of quality.
Although aftermarket parts are inexpensive, they are typically used for more general vehicles. OEM part replacements are also usually needed for essential parts, such as the engine or air bags. Many companies make use of a mix of the two. For example: They will opt for OEM parts when it comes to airbags or engine components, but if repairs are needed for areas such as door handle or the fender of the car, they might offer coverage for aftermarket parts only. It is always a good idea to be aware of this factor before you get your car repaired. In some cases, you might not mind it at all, whereas in other cases, it does make a difference to people. The good news here is that your car insurance company might offer you all OEM parts but, it might cost you more. in snow.
9. Can the Claim be Made at Any Time?
Car accidents and incidents can happen at any time and at any place. Submitting a claim is always done best immediately and at times, the person might need the insurance company to help them make towing arrangements. For this reason, it is always necessary to make sure that you are working with a company that offers you 24/7 support and the ability to reach out to them as soon as possible.
Additionally, having assistance for roadside accidents can help you save more money from the accident. Working with a company that offers this benefit makes a huge difference since you have to deal with lower out-of-pocket expenses. Filing for a claim is also made simpler and easier when your insurance company is among the first people you are calling for help.
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