Picking the right auto insurance can be a very tough decision. With so many insurance companies out there and the constant advertisements of these companies on TV, it becomes really hard for a person to decide which is the best insurance for their car.
Being said that, there are many insurance companies out there that claim to be the “best” which may not be the case because there are many questions that need to be asked before taking upon any insurance plan. For instance, there are different policies, different rates and a variety of other factors which include your daily routine, your working hours and so much more that needs to be considered before signing up on any insurance plan.
Preparing yourself for an interview with an insurance agent beforehand and not blindly trusting the entire process should prove to save you a ton of money if anything goes south.
I’ve compiled a list of 10 basic, useful questions that are going to help you understand what insurance is and which is going to shortlist some companies that may fit your budget and schedule.
What Kind Of Auto Insurance Coverage You Need?
Every country, state, and province has different rules and regulations when it comes to car insurance. Therefore, getting insurance that’s mandatory by the state is absolutely necessary. For instance, most states require only liability insurance which basically covers the cost of anyone who’s injured or dies during a car crash along with damage to the vehicle and property.
With that being said, there are certain additional types of coverage that you might need:
Collision Insurance Coverage
This type of coverage repairs any damage to your car no matter if it’s your fault or the other drivers. However, this rule is based on the deductible system. For example, if you have a high deductible then you have to pay more out of your pocket but on the other hand if you have a low deductible that means you have to pay less from your own pocket.
Let’s assume that you have a deductible of $500 and the repair costs of your vehicle are around $800 then you will have to pay the first $500 before the insurance company kicks in.
Comprehensive Insurance Coverage
This additional type of coverage in your car insurance plan covers damage to your vehicle that’s caused by non-crash incidents, incidents that include fire, vandalism, natural disasters, and most importantly, theft.
There’s also a deductible involved in this type of insurance plan.
Personal Injury Protection Insurance Coverage
This type of coverage pays for medical expenses if you or your passengers get involved in a car crash. Moreover, if you’re driving another person’s car and you get involved in a car crash, your insurance company will pay for the medical bills.
Uninsured or underinsured motorist protection
This type of coverage is required by most states. UM or UIM covers car repair costs if you get hit by an uninsured or underinsured driver. There’s no deductible involved in this type of coverage but the insurance claim is less. In most states, it’s around $3500.
What is my deductible going to be?
If you get involved in a car accident, you will have to pay a certain amount out of our pocket. This is what they call the deductible. The rest of the amount will be covered by your insurance company.
Like I said earlier, every insurance company has a different policy. According to Car Insurance rates, most common deductible amounts are somewhere around $0 to $1500.
The deductible amount pays a huge role when it comes down to insurance, you can lower your premium by increasing your deductible. However, you should keep in mind if your car gets totaled, your deductible amount will be high and you would have to pay more out of your pocket.
What is my Risk Assessment?
The deductible that you will be given is based on how likely you are to get into a car crash. In other words, how much of a risk you are to the insurance company.
There are several factors on which your risk assessment is generated. To name some, your age, sex, driving record, criminal record and so on. So let’s assume that you’ve had a couple of speeding tickets bam your insurance rate will be high. If you live in a location where car theft is on the regular, your auto insurance will be high.
Also, age plays a very important role, elderly folks are usually charged with a higher insurance rate.
Does your Insurance Company offer discounts?
Don’t make the mistakes that I made, I didn’t ask my agent if their company offered discounts. Almost every car insurance companies give out added benefits or in other words discounts.
There’s a catch to this, you must be eligible to apply for a discount which is also referred to as credit. If you’ve got a clean driving record, your car has safety features which include airbags, a tracking system, you might be eligible to get a discount from the company.
If you’re a returning client of the company, it can raise your chances of getting a discount. Furthermore, if you have a proper car parking garage or if you drive an eco-friendly car (hybrid), your insurance company will likely give you discounts.
Again, it’s all based on your risk assessment.
Will my policy cover other drivers that are using my vehicle?
A question that is overlooked by many people, what if your friend is using your car and ends up in a car crash? Will the insurance company cover that?
I have bought myself this additional coverage because I lend my car to a lot of my friends and secondly, in my free time I deliver food via Uber Eats which is why I need the additional coverage. Again, it totally depends on the state in which you’re living at and most importantly, how many people use your car.
Do you offer services 24/7?
Car accidents are terrible no matter how big or small they are. You should always ask your insurance agent if you can make claims even at the worst hour. It’s a known fact that nowadays, accidents mostly happen at night and usually late on weekends. Your insurance company won’t be any good if they can’t offer any help in your time of need.
Most companies nowadays offer 24/7 coverage which basically means that you can make claims during any time of the day or night. Regardless each company has their SOPs, either they will require you to file a complain online, via phone call or just by coming to the office and reporting the accident.
While most companies offer help anytime, it’s still better to ask this question for your peace of mind.
In case of an accident, will you pay for original manufacturer parts?
This question is for all those car enthusiasts out there and again, an overlooked question. Most car lovers assume that if they end up in an accident, the insurance company is going to pay for the Original Equipment Manufacturer (OEM) parts. That’s not the case.
No matter how good your insurance agent is, you have to remember that they need to make some money too. While most states have a rule that car insurance companies have to replace the ORIGINAL car part that has been damaged, many don’t. I guess we owe it to the fact that aftermarket body and mechanical parts are much cheaper than their original ones. I think that’s because aftermarket safety parts are not that trustworthy but that’s just me.
Furthermore, there are also insurance companies out there that would replace OEM parts especially safety parts. These include airbags, damage to the car alarm and so on.
How will you value my car?
When you report a car accident, the insurance company sends a personnel called the adjuster. Adjusters usually evaluate the total worth of a car and the damages that have been caused to it. If he reports that the total damage is 60-70%, they’re going to refer to it as a totaled car.
Now, why is this important?
If your car is worth a lot, your insurance company might not cover it. That’s the thing with cars, the expensive they are the more will be the premium and lower will be the chances of you to redeem your insurance claim.
Therefore, when shopping for insurance, it’s always best to ask your agent if their company covers the repairs of your car.
What is the payment breakdown plan?
Signing up for an insurance company that fits your budget should be your top priority. Most insurance agencies require monthly, quarterly and yearly installments which makes it pretty easy for you, as the client.
It is also worthy to note that companies who require monthly installments tend to give more discounts. Therefore, it’s absolutely necessary to know about the payment plan when signing on any insurance document.
Where’s your office?
In this day and age, scams are on an all-time high. You will be approached by tons of “insurance” agents who will be able to good “deals”. But when we’re talking about complicated matters such as car insurance, it’s always best to head on to the agents’ office. Having a face to face conversation makes the job so much easy.