Car insurance policies are written and managed by insurance companies, meaning that they each have different features and prices. These differences can make it difficult to figure out which one is the best choice for you—and because of this, many people end up paying more than they should or having coverage that isn’t what they need. In order to find the best car insurance policy for your needs, keep these top three tips in mind.
What is car insurance?
Car insurance is a policy that protects you from liability in case of an accident. The average car insurance coverage includes damage or loss, bodily injury and medical payments for all injured people. This is separate from collision and comprehensive coverage, which are meant to pay for repairs after accidents.
Liability coverage pays for all your legal responsibilities if you cause a car accident; car insurance may cover all costs related to injuries and property damage that result from your actions. A typical car insurance policy will also include uninsured/underinsured motorist protection, personal injury protection and a personal property reimbursement policy – all of which protect you financially when an accident occurs.
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How much do you need?
A lot of car insurance policies are sold on a pay as you go basis; if you don’t have a lot of miles or points on your license, then you’ll pay less for coverage. This means that you will have to adjust your insurance plan as time goes by and as your financial situation changes. How often do you need full coverage?
Most people only need it when they get a new car, when they add another driver (such as a teenager), or when they move states. If any of these apply to you, take out full coverage at those times—you should be able to save quite a bit.
What are your options?
The first thing you need to know is what your options are. Because car insurance policies can vary a lot, it’s important to know exactly what you’re buying before you put pen to paper. T
o help with that, we created a list of 10 common provisions for car insurance policies and how they can affect your policy—for better or worse.
We even included links so you can learn more about each one if it interests you. Once you have an idea of what kind of coverage you’re looking for, finding the right policy will be much easier.
How often should you change your car insurer?
While many people stick with their car insurer for years, if you don’t shop around you may be missing out on a better deal. One of MoneySuperMarket’s most popular topics is on how often motorists should shop around for cheaper car insurance.
The general rule is that if your circumstances have changed – perhaps you started driving more miles or switched cars – it’s worth looking at alternatives. Other reasons you may want to switch include significant changes in premium price, or high levels of customer service complaints.
Overall switching could save motorists up to £350 a year according to findings from insurance comparison site Gocompare earlier in 2017, who analysed two million car insurance quotes.
Common mistakes
When comparing car insurance quotes, take time to consider what each policy entails. For example, a higher deductible will save you money on premiums but you may end up paying more out of pocket if something does happen.
On top of that, make sure you understand any extra coverages your company might provide (like roadside assistance or rental reimbursement) and whether they cost extra.
Also think about how much coverage you really need; for example, if your current liability limits are fine and there’s no one else on your policy with coverage, then an additional $1 million in umbrella coverage is just overkill.