Shopping for car insurance can get confusing and overwhelming. You need to make sure that you can afford it and you have enough coverage for your peace of mind. Here’s how to determine the best car insurance coverage for your needs:
1. Know the types of car insurance coverage
There’s a minimum requirement for car insurance in every state, known as the liability insurance. It covers the expenses towards other people or property when you are at fault. However, it pays to consider getting additional coverage (collision and comprehensive coverages) which pays for the cost of car repairs in case of accidents and protects your vehicle against natural calamities and theft respectively.
2. Know how much can you afford
If you have sufficient health insurance, you probably don’t need as much personal injury protection. However, you do want to get covered with collision, and comprehensive policies as these will pay for repairs and replacement of your car. These two coverages have deductibles, and it pays to know how much deductible you can afford. The higher the deductible, the lower the insurance premiums.
3. Determine your financial status
Insurance shouldn’t make you “car poor.” You don’t want to be paying too much on car insurance only to end up getting in deficit with your other essential expenses. However, you also don’t want to carry very little protection as you’ll end up paying more out-of-the-pocket in the event of an accident. You do want to strike the right balance between your financial standing and peace of mind.
The level of car insurance coverage is different for everyone. You may need more insurance if you tend to be a reckless driver or you’re driving a newer car. However, car insurance coverage doesn’t need to be static. Once you’re about to renew your policy, do a self-assessment of your own finances and meet with your trusted agent to nail down the best coverage for you.