Five Things to Consider When Buying Car Insurance

by Kausik Dutta
Everyone needs car insurance and of course, everyone wants the best insurance for your car at the best price. Whether you are considering changing your current insurance or looking into coverage for a new car, there are many factors to consider. It's always a good idea to do some research and get several quotes before you make a decision. Read below to learn about other things to consider when buying car insurance.

#1 Types of Insurance There are many types of coverage that you can have included in your insurance policy. Beyond liability, common policies may include collision insurance which protects you in the event of an accident, and comprehensive insurance which protects against hazards like fire or theft. It may be worth your time to look into other policies you may not be familiar with. For instance, breakdown insurance can cover the cost of repair if your car breaks down on the road or cover a tow to a service station. Investigate the different types of insurance available and which type and what coverage fits your needs.

#2 Shop Around Insurance policies will vary from company to company so it's worth your while to shop around and compare prices. With hundreds of insurance companies competing for your business, comparing prices and getting several quotes could save you hundreds of dollars a year. Although price is important, make sure you also take into consideration the company and your agent. It may be worth a few extra dollars for a company with great customer service and an agent that you can trust.

#3 Deciding on your Excess Although it may be tempting to go with a lower excess on your car insurance, consider the effect it will have on your premium. Although a ?50 excess may sound great, a ?200 excess may save you more money in the long run because of lower monthly payments. Some considerations to take into account when deciding on your excess are the age and condition of your car and what it will most often be used for.

#4 Consider Your Budget Hopefully, you take your budget into consideration before buying a vehicle. The same should go for your car insurance. Although you want your coverage to match your vehicle needs, you also want to be able to afford it. Think about how you will be able to pay for your insurance. Most companies offer you several payment options allowing you to choose from monthly, quarterly, every six months or yearly payments. Consider what would work best for you and if any discounts or penalties apply for different payment methods. Take advantage of specials that can lower your rates as well, such as good student discounts and discounts for completing training such as defensive driving classes.

#5 Understand Your Insurance Policy Lastly, make sure that you understand your car policy. There are five main parts to an insurance policy: declarations, coverage, exclusions, conditions and definitions. Declarations are the personal information about the driver(s) and vehicle(s) that will be covered. Coverage describes the coverage and limits of the policy that you purchased and Exclusions will outline what is not covered. Conditions explains the responsibility of you the insured, and your insurance company. The Definitions section defines terms, and highlights your rights and the rights of the insurance company. Take a look at all parts of your policy and make sure that you understand everything. If you don't understand or something doesn't look right, ask your agent and make sure it is cleared up. You should have an agent that is willing to explain everything to you.
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