If you are buying a new car or comparing auto insurance rates online, there are key questions you will need to ask yourself before making any decision.
Car ownership is a huge responsibility, and such responsibility comes along with extra costs you need to address for a safer experience.
As it is commendable to pay attention to basic maintenance issues on a vehicle, auto insurance also deserves equal attention, particularly when you need to stay on budget.
Hence, prior to making any arrangements or reaching out to multiple agents, let us walk you through the 8 best questions to ask when buying auto insurance.
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Think about it! You don’t want to get in touch with an agent who won’t be able to connect with your financial needs unless you know what you want.
How often do you drive your car?
According to the U.S. Department of Transportation., the average American drives 13,474 miles each year. There may be specific variations on an individual assessment, but this figure directly encourages auto insurers to adjust their policies based on frequency and risk propensity.
Whether you drive to work or have to run errands every single day, calculate the number of miles you put in your vehicle and talk to your agent about it.
Your goal is to get a policy that reflects how much you drive your car.
Tip: Ask your agent for mileage-based insurance if you are not a frequent driver.
Will you buy a car to commute?
If you need to buy a car to commute and carry out other tasks that will increase the time you spend sitting behind the wheel, then auto insurance is a must!
For example, people involved in ride-sharing, pizza delivery, or any other commercial activity, cannot rely on personal insurance for their own protection.
Business auto insurance exist based on two premises:
- Business driving is riskier than personal driving.
- Business driving violates the purpose of having a policy for personal use.
What type of car do you drive?
Auto insurance companies are the “national experts” when it comes to tracking and sharing data about current policyholders and their vehicles. By looking at your car’s ISO rating, they can determine how risky is a particular vehicle to insure.
Safety rankings means a lot. For instance, if you purchase one of the latest sports car in the market or a modified classic car, your auto insurance agent will assign you a policy that reflects the risk of insuring such vehicle.
Whereas certain vehicles that are regarded as “safe” can help buyers access more competitive policies and further discounts.
Are you in love with your car?
Part of being a car owner also relates to connecting with your vehicle. How much attention do you give to your vehicle?
It is ok to be in love with your car as long as you make the necessary changes to upgrade your driving experience and safety.
Feel free to ask your agent about collision, comprehensive, and glass coverage. But if you take your vehicle as a basic form of transportation, you could opt for limiting your policy to liability.
Where do you live now?
Auto insurance agents also adjust policy rates according to your location and where you park your vehicle.
By knowing your state and zip code, insurers know what type of drivers reside in your area. Say, for example, Detroit, Michigan faces the highest auto insurance rates due to high crime rates and their local non-fault insurance system.
Where you park your vehicle also impacts your policy. You may get a more expensive policy if you park your vehicle on the street in New York City, as opposed to relocating to the suburbs or living in a rural area.
Will someone else drive your car?
If you are not planning to lend the vehicle to anybody else, then you won’t need to worry about it. But there are times in which we wonder whether it is correct to let others drive our own vehicles.
In some circumstances, you may be allowed to let other drivers use your vehicle, but that also depends on the auto insurance company and your particular policy.
If there are other people living in your house, who also borrow your vehicle, you are strongly advised to list them in your policy.
What are your duties?
Almost every state requires motorists to purchase an auto insurance policy for their own protection.
You cannot get out of this particular obligation because it is part of the law. However, each state sets their own minimum coverage requirements and they tend to be quite low.
For example, Florida set a minimum coverage that encompasses the following:
- Personal injury protection (PIP) – $10,000 and,
- Property damage liability (PDL) – $10,000
Is my car financed or leased?
Whether you plan on financing or leasing a vehicle, you might as well be asked to insure the vehicle for its complete value. That also includes any gap between what you owe and your vehicle’s market value.
Comprehensive and collision coverages will take care of any damage to your car in the event of an accident, while supplemental gap insurance will take care of the rest.
Be mindful! There are other equally-important factors that you need to consider when shopping for auto insurance such as:
- Driving record
- Credit record among others.
It is in your best interest to learn what questions to ask when buying auto insurance, especially when you are a first-time shopper.
Your curiosity may be rewarded, so think about it. Once you answer those questions, quickly get in touch with an agent and get a policy that matches your expectations.