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7 Factors to Consider When Choosing the Right Auto Insurance Coverage

Published: March 7, 2023

When it comes to protecting your vehicle and your finances, choosing the right auto insurance coverage is crucial. With so many options available, it can be overwhelming to determine the best policy for your needs.

To simplify the process, here are seven factors to consider when selecting auto insurance coverage. From coverage types to discounts and customer service, this guide will help you make an informed decision and find the right policy to fit your budget and lifestyle.

  1. Coverage Types 

Auto insurance coverage can be broken down into four types:

  • Liability insurance covers damages caused to other drivers and their vehicles. 
  • Collision coverage pays for damages to your vehicle after an accident. 
  • Comprehensive coverage covers non-collision incidents like theft or natural disasters. 
  • Personal injury protection pays for medical expenses and lost wages for you and your passengers.

Each type has its own advantages and disadvantages. Liability insurance is usually the most affordable but offers the least protection. Collision and comprehensive coverage can provide more protection but can be expensive. Personal injury protection is mandatory in some states but optional in others.

  1. State Minimum Requirements 

It's important to know your state's minimum auto insurance requirements. The failure to meet them can result in legal and financial consequences.

To find out your state's minimum requirements, you can contact your state's Department of Insurance or visit their website. The minimum requirements typically include liability coverage, which covers damages you may cause to other drivers and their vehicles in an accident. Some states may also require personal injury protection or uninsured/underinsured motorist coverage.

  1. Deductibles and Premiums 

A deductible is the amount you pay out of pocket before your insurance coverage kicks in. A higher deductible typically means lower premiums, but it also means you'll have to pay more out of pocket in the event of an accident. On the other hand, a lower deductible means higher premiums but less out-of-pocket expenses if you need to file a claim.

Premiums are the amount you pay monthly or annually for your auto insurance coverage. They can vary depending on several factors, including your age, driving record, location, and coverage options.

When choosing your deductible and premiums, consider your budget and financial situation. A higher deductible can save you money in the long run if you don't frequently file claims. However, it's important to ensure that you can afford to pay the deductible if you do need to file a claim. Similarly, while lower premiums may be attractive, ensure that you have sufficient coverage limits to protect your assets and finances in the event of an accident.

Consider checking Assurance auto insurance comparison website. You can request for multiple quotes from various insurers, making it easier to offer their coverage types, deductibles, and premiums. 

  1. Coverage Limits 

Your policy’s coverage limits determine the maximum amount the insurance company will pay for damages.

Choosing the wrong coverage limits can leave you at risk for significant financial loss if the damages exceed your policy limits. On the other hand, higher coverage limits can increase your premiums, but they provide more comprehensive protection.

To determine the appropriate coverage limits for your needs, consider your personal circumstances. For example, if you have significant assets to protect, higher coverage limits may be necessary. Additionally, consider the likelihood of severe accidents or incidents based on your driving habits, location, and other factors. 

  1. Discounts and Special Programs 

Auto insurance companies often offer discounts and special programs that can help you save money on your premiums, including the following:

  • Safe driver discount: It rewards drivers with a clean driving record and no accidents or violations.
  • Multi-car discount: Those insuring multiple vehicles in the same insurance company can be eligible for a discount. 
  • Low-mileage discount: It can lower the premium of those who do not drive often. 
  • Usage-based insurance: This can provide personalized insurance rates based on driving habits, such as speed, braking, and time of day.
  1. Customer Service and Reputation 

A company with poor customer service may provide inadequate support in the event of an accident or incident, leading to additional stress and frustration. Additionally, a poor reputation may have a history of denying claims or providing inadequate coverage.

To evaluate an auto insurance company's customer service and reputation, consider researching online reviews and ratings from previous customers. Additionally, check for complaints filed with the Better Business Bureau or state insurance department.

  1. Process of Filing Claims 

When selecting an auto insurance company, consider their claims process and reputation for handling claims. Look for companies that offer a straightforward and efficient procedure with clear communication.

Filing an auto insurance claim can be a complex process. In a nutshell, here’s how the process works for most insurers:

  1. Report the incident to your insurance company as soon as possible.
  2. Gather evidence and documentation, such as photos, police reports, and witness statements.
  3. Work with your insurance company to assess damages and determine coverage.
  4. Submit any necessary forms or documentation to your insurance company.
  5. Follow up with your insurance company regularly to ensure the claims process is moving forward.

Conclusion 

Choosing the right auto insurance coverage is crucial for protecting your vehicle and finances. Consider the different coverage types, state minimum requirements, deductibles, coverage limits, discounts, customer service, and claims process when selecting a policy. Shop around to find the best policy for your needs. With these factors in mind, you can make an informed decision and ensure that you have the protection and support you might need. 

Founder, Editor-in-Chief Carmelo Pickel is the Founder and Editor-in-Chief of Keep Driving, with almost 20 years of experience working in the industry. Before founding Keep Driving, Carmelo held leadership roles for over a decade on top automotive dealership corporations across North America, handling various leadership roles in Sales, Marketing, and Incentives.
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