Auto insurance is both an expense and an investment. If you are fortunate and never have to use your car insurance, it will seem like a huge waste of money but if you have a serious accident tomorrow, it might just be the best investment you ever made. Before purchasing your car insurance take some time to review these five essential auto insurance tips. So, whether you are driving an old beater or a nice new shiny set of wheels – you need to make some tough decisions on what and how much protection you can afford and how much you need both for your car and for yourself. Here are five things you should consider before getting a car insurance quote:
1. Factors that influence car insurance rates
Insurance companies use a process called “underwriting” to evaluate insurance applicants. They evaluate both the drivers and the cars on the policy to identify potential future losses. The drivers on the policy are rated based on their own, personal, prior driving history as well as their ‘group history’, the likely hood that people of their age, sex and other factors are expected to submit claims. So your rate will be based on a group score and then also on the number of tickets and accidents they have had.
Another factor that may seem unrelated to car insurance is your credit history. The insurance companies have seen from past experience that those with good credit are less likely to be involved in accidents.
There is not much you can do about your age and sex, but on those factors you can influence, work hard to keep them on the positive side of the scale. Keep your credit history clean, drive responsibly to avoid getting traffic tickets, and drive defensively so as to avoid car accidents.
2. Lower your car insurance rates by choosing a higher deductible
The more you are willing to pay yourself after a covered accident, the less the insurance company will charge you for your comprehensive and collision coverages. A higher deductible means the insurance company knows you are not turning in every minor incident and also that you take more responsibility for your actions.
A major choice you must make is deciding how high of a deductible you can afford. If you cannot easily come up with $1,000 to fix your car you should look at a lower deductible. A lower deductible means you will have to pay more each month but that higher monthly payment may be easier on you than watching your car sit at the body shop while you try to come up with the extra money.
3. Keeping your insurance active
Allowing your car insurance to cancel means you will probably have to pay more for your new policy. Insurance companies, in general, view those who let their policies lapse as less responsible especially if there are no extenuating circumstances like being out of the country for an extended period of time.
If you are planning to switch to another car insurance company, make sure to purchase your new car insurance policy before you letting the other policy cancel. As a matter of fact, you should ask your new agent to handle this for you. If they don’t offer to do it, or won’t, you should look for a better agent.
4. Optional coverages are often the most useful
Although liability insurance is mandatory and tends to cost the most, adding a bit of expense by adding some optional coverages can make your car insurance much more helpful in situations.
In Washington state, Uninsured Motorist and Personal Injury Protection (PIP) coverages are optional but are the most frequently requested coverages after an accident. Do you want your insurance company to pay your passengers’ and your medical bills after an accident? Then PIP is essential.
If someone hits you and does not have their own insurance then Uninsured Motorist coverage will be the coverage you wish you had. Your insurance company will pretend they had them insured and pay you then go after them to recover the amount they paid you. Without this optional coverage, it will be up to you to chase down the other party, take them to court, etc., etc.
Other optional coverages are not as catastrophic not to have but can still be quite useful, roadside assistance, rental car after an accident, etc. Ask your agent what optional coverages are available and make your own decision on their value to you.
5. Make sure your car insurance is affordable
As we have mentioned before, a good rule of thumb is to buy as much coverage as you can comfortably afford to cover the risks you want to avoid.
When deciding what kinds of auto insurance coverages you want, make sure to consider your financial circumstances. In other words, if you have a spare car already insured or can borrow one from family, then you might not really need rental car coverage. If you have a reliable car and can afford to pay for a tow truck once every few years when needed, then maybe you don’t need towing or roadside assistance. If your car is only worth $1,000 or so, maybe $300/year on a $500 deductible collision coverage doesn’t make much sense.
Get an affordable car insurance quote
You can call us at (509)783-5600 or come into one of our offices in Kennewick, Pasco, or Yakima, or use our online quote page to build your car insurance policy with the coverages, options, and deductibles that you can afford.