You've bought the first car and made your mind to insure it, but you don't know what to start with. Desire to save money by all means sometimes pushes us on a wrong way. Mistakes appear at once as soon as you have decided to be insured independently. Sometimes it works of course, but if you want it to be done properly it is better to address the expert - insurance agent or a broker. Their services will not cost you much (or even anything) but may appear very helpful. They will explain you the meaning of special terms, the difference between this or that type of policy. They can also tell you about the prices and discounts of various insurance companies and help you to choose the most appropriate.
However, if you've decided to do everything on your own it's obligatory to familiarize yourself with the main notions and principles of insurance process.
1. First of all think over your needs. Decide what type of coverage you are going to need and try to correlate it with the sum of money you can afford to pay for your insurance.
Your insurance rate has many factors and can be controlled by the amount of coverage you decide to place on your vehicle. Depending on the state law you are required to buy a minimum amount of some or all of the following types of liability coverage:
a) Bodily injury liability: Protects your assets if you are held liable for an auto accident in which other people are injured or killed.
b) Property damage liability: Covers repairing or replacing the cars or other property of other people.
c) Uninsured/under insured motorist coverage: Unless you live in a "no-fault" state (where your own insurance will cover your losses), this coverage insures you against damages caused by other drivers with little (under insured) or no (uninsured) auto insurance.
There also exist other types of insurance which are not mandatory in most states, but you may purchase any of it if you want to be more protected. For example, collision insurance covers the repair or replacement of your car if it's damaged in an accident. Comprehensive insures your vehicle against damage caused by an unknown party or by a natural disaster (e.g., theft, fire, flood, vandalism). Medical payments or personal injury protection covers various medical expenses which your or your passengers' health insurance doesn't meet.
2. After you have made your mind concerning the type of coverage needed, you have to choose an insurance company. Analyze the market before making choice. Compare prices and terms of different companies. If your tight schedule keeps you from dealing with more than one insurance company you may use various online services which give possibility to compare insurance rates of the nation's top insurance companies.) Many of them charge different premiums for the same amount of coverage. When you single out several most appropriate variants make sure those companies have a good reputation. You might also want to check with your state's department of insurance to find out if a particular company has a high number of consumer complaints.
3. When you have singled out the company you want to co-operate with be very careful making the contract. What is the most important in an insurance policy? « Its price », - the majority will answer. But it's not so. The crucial role is played by the contract in which each word matters. Don't sign it until you are sure about every word in it. Otherwise you will receive a useless paper on the basis of which the insurer will pay you nothing. For example, sometimes the contract obliges the client « to observe traffic rules», « to provide safety of the car», «to observe the standard safety rules». An insurance company may imply various meanings to these harmless phrases, which may appear to be very unfavorable for you. And if you fail to fulfill these requirements the insurer may refuse to cover damages. So try to avoid such unclear phrases in the contract, demand a concrete definition of terms. Otherwise the insurance company will save money but not you.
4. Finally, try to find out and get all available discounts. They may vary from state to state but most insurance companies offer the following discounts:
- Combination Discounts - if you insure two cars or your home and car with the same company you can save up to 20%
- Defensive-Driving Classes - this can often merit a 10% discount on premiums.
- Retirement Discounts - you can cut the expenses on auto insurance, especially if you retire at a relatively young age (you're likely to be driving less once your working days are over).
- Discounts for installation of security and safety devices like car-alarm, tracking system, anti-lock brakes, automatic seat belts and airbags in your car.
- College-Kids-Who-Are-Far-Away Discounts - if at least 100 miles separate your kid from your car, you could save up to 40%.
- Marriage discounts - marriage can lower your car insurance rates because married people are considered safer and more stable.
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