How first time auto insurance buyers should complete their purchase
Many first time automobile insurance coverage buyers are unaware of how to buy the right type of coverage that can suit their needs. The first thing to do is to go online and research your state’s requirements for auto insurance coverage. This will be your starting off place so that you can begin to put together the right policy options.
Next, you need to assess your vehicle. Is your car new or financed? If it is then usually you will be required to maintain at least collision or comprehensive insurance coverage on your vehicle at all times. If you do not, then your financial lender who made the loan can actually re-possess your vehicle. This is because they want to make sure that their financial investment is protected at all times. If you just insure your new or financed vehicle with liability coverage only, then the car would not be repaired or replaced in the event of an automobile accident.
Banks hold the note to the vehicle until the balanced owed is paid off in full. If the car is totaled and they cannot get a check to be re-reimbursed for the money that is still owed then they lose a lot of money.
This is why it is standard in all of the 50 states for drivers who take out auto loans to carry collision or comprehensive insurance coverage at all times. The banks protect their investment and you can even get gap insurance coverage if you are financing a vehicle for more than it is currently worth. This type of insurance coverage fills the gap that your insurance coverage does not cover so that you have no real financial liability after a car is totaled. You can walk away without the burden which can be a huge lifesaver for many drivers in today’s bleak economic times.
Next, we will address the kinds of auto insurance coverage that is currently available to drivers today. You can take out liability insurance coverage. Now, most states require that you have this type of coverage. You will need to make sure that your insurance policy has the right coverage amounts. If you have an older car that you could replace if it was stolen or totaled then this coverage is probably right up your alley. It is very affordable and covers the repairs and medical bills necessary for the other driver or drivers who were involved in the automobile accident. Your vehicle will not be repaired or replaced which is why the premiums are so low.
Collision coverage is for newer vehicles and it covers theft, accidents, and other issues with vehicles. It is more expensive but you never know what life has in store. Many vehicles are stolen every day so being able to get a new vehicle after a theft has taken place can be a huge relief.
Comprehensive coverage covers just about everything including fires, theft, vandalism, and weather incidents that happens to vehicles. If you own more expensive or collector vehicles then having this type of insurance coverage is great for you. You want to have coverage that will minimize your financial losses as much as possible.
Many people who choose to be uninsured or under insured end up in dire financial straits. In today’s economy, many drivers can sue people who are under insured or not insured at all. These people often face wage garnishments and end up filing for bankruptcy. Choose the policy that you feel comfortable with so that you are not kicking yourself once you have to start the insurance claims process.