For new drivers, earning that license may seem like the biggest challenge when it comes to driving. However, obtaining the right car insurance is another obstacle many drivers dont consider. These tips will help you keep in mind all you need to know about car insurance as a new driver.
Consider Your Car Insurance Coverage
If you are driving a car that is registered in your name, you likely need car insurance. It is the law in most states. However, there are several different types of coverage. Understanding all of the coverage types is the first step in determining the type or types of insurance that will best meet your needs.
Liability insurance is the most frequently discussed type of insurance because it is required in most states. It covers the cost of both injuries to other parties and property damage in the event of an accident.
Personal injury protection is the car insurance that will cover the cost of your medical expenses as the driver whether you are at fault for the accident or not. This coverage will also cover your passengers.
Uninsured motorist insurance is sometimes overlooked. While most states require insurance, in the event that you are in an accident and the driver of the other vehicle does not have insurance, this coverage can cover your medical expenses and also the cost of any vehicle repair. This insurance is sometimes required, but it can vary from state to state.
Collision and comprehensive coverage is an optional coverage because it only addresses your vehicle. Collision covers the cost of repair or replacement should an accident occur. If your vehicle is damaged through other means, such as a natural disaster or vandalism, comprehensive coverage will cover those expenses. Though these types of insurance are not required by law, if you have an auto loan, you are often required to carry these types of coverage.
Other coverage options include towing, roadside assistance and rental car coverage. With any type of coverage, it is essential each driver read the fine print to understand what is and isnt covered.
Determine Your Coverage Needs
Your coverage needs are determined, at least in part, by the state in which you live and whether or not you own your vehicle. Researching state-by-state requirements and understanding what those requirements mean is important. For instance, if your state requires 20/40/15 coverage, that means you have to carry an insurance policy that will cover $20,000 worth of medical expenses per person, with a total coverage payout of $40,000 in medical expenses. That coverage also requires you to have $15,000 worth of property damage coverage. In addition to state minimums, if you’re still paying off your vehicle, the loan company will likely have insurance coverage minimums for you to follow.
Beyond those requirements, your coverage needs may also depend on your risk tolerance. Many people feel that the state minimums are not enough. You can be sued for any additional expenses not covered by your policy making additional coverage a good idea. Any damages you are held liable for can come out of your bank accounts, your assets or even your paychecks through wage garnishment.
Combat Premium Costs
Even if you choose to carry more than the minimum coverage, there are many ways to reduce your premium cost. When you establish your insurance policy, it will come with a deductible. The deductible is the amount of money you are responsible for paying out-of-pocket before your insurance coverage begins. Based on yours savings or your current income stream, you may opt for a higher or lower deductible. If you opt for a higher deductible amount, your monthly premiums will be lower. But you will feel more of a sting should you need to use your coverage.
In addition to adjusting your deductible, there are other steps you can take as a new driver to lower the cost of your insurance premiums.
- Shop around. As a new driver, working with a company such as SelectQuote you can get multiple quotes with one call to (855) 777-6090. It is great way to compare rates on the same level of coverage. And you can always start by visiting us online at www.selectquoteautoandhome.com.
- Consider how often you pay. Many insurance companies offer discounts to drivers who pay their insurance for the whole year in single or twice-yearly payments.
- Build your credit score. Your credit score impacts your premium costs. Establishing several lines of credit, paying your bills on time and keeping your overall utilization ratio low can go a long way to keep your credit score healthy.
- Inquire about discounts. Insurance companies offer a variety of discounts based on everything from clean driving records and anti-theft devices to good grades and defensive driving courses. Ask specifically about all of the different discount options that an insurance company offers.
- Bundle your policies. If you find yourself in a position where you need to insure multiple cars or carry multiple types of insurance (renters, homeowners, etc.), you may be able to obtain a discount for bundling or purchasing all of your coverage from the same company.
In the Drivers Seat
Understanding all the requirements is a starting point for how much insurance each new driver needs. From maintaining a clean driving record to paying your bill yearly, there are ways to make additional coverage more affordable. Its peace of mind for your wallet and peace of mind as you get behind the wheel.
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