When choosing your car, be it a brand new model or a pre-loved car with one or more previous owners, you do take into consideration the many features of the vehicle.  Yet when insuring your car often times this is the last thing we would think of doing.  Yes, we do ask firstly what is the cost of insuring the particular car you are about to purchase. We could also be swayed by the savings on premiums offered for low-cost policies.

Yet, this ’savings’ could end up costing you more dollars.

When You Are Liable

The way these low cost insurance policies work is, that they have low liability limits, some could be as low as $25,000, which could mean if you are involved in an accident and are liable then you could be responsible for paying for the other person, the medical expenses, loss of income and other damages.  $25.000 doesn’t go far these days so the amount over and above that you would have to pay personally.

You need to make sure you are covered sufficiently.  Read your policy carefully and when you don’t understand something or are not sure, seek advice from someone who knows.

Choosing An Insurance Agents or Insurance Sales Representatives.

Using an insurance agent has it’s advantages.  Firstly the agent will assess your needs and look into your risk profile so they have a good understanding of where you are at and what your car insurance should cover for you.

Don’t get an insurance agent and an insurance sales representative confused.  An insurance representative works for a particular insurance company, so they will be recommending that insurance company’s policies.  Whereas an insurance agent works independently and will source out the best car insurance policy from all the insurance companies, the one that will best fit your needs.

There are a few things you will need to discuss with your insurance agent when looking for car insurance and these are:

Your assets and your net worth
What you feel about asset protection and insurance
What you expect if you need to make a claim

What If You Need To Replace Your Car After An Accident?

This is an important area of car insurance.  Many car insurance policies pay for total losses on the cash value of your car and not the replacement cost.  Depending on the age of your car, you could be out of pocket quite some dollars, as you will have to come up with the difference if you wish to have the same car.

This clause in your policy will depend on the age of your vehicle.  Many car insurance companies will give full replacement if you car is purchased brand new. They will do this for a specified time and then you need to make sure you understand what happens after that time.  Some companies will do the full replacement for a year, others will have special offers for special car promotions..

Whenever you see that teensy, weensy print at the bottom of an advert “Conditions Apply”, make sure you find our exactly what the ‘conditions’ are and see it in writing.

The policies that pay, after total loss during the first twelve months, the full purchase price, plus taxes and license fees, etc, will each year after, lock in the car valuation as set by the industry’s standard ‘retail’ Blue Book.

Are You A Multi Car Family?

If you have more cars in your family than drivers then you may need to seek out a specialized insurer, you can be penalized by the bigger insurance companies.

The majority of car insurance companies aren’t expecting a family to have vehicles not driven by family members, They rightly or wrongly assume that the extra vehicles will be driven by undisclosed teenagers who would normally cause the premiums to be much, much higher.

If you do have cars that are not driven on a regular basis, maybe you are a collector or you have recreational vehicles then it would be better for you to seek a car insurance company that ill customize your rates to your needs.  This is where an insurance agent can be worth their weight in gold.

Take Care Of The Little things

Where you have items covered or not covered in a low-cost car insurance policy, this will be found in the fine print.  These items may seem not so important when you first sign your policy.  Many things with any insurance policy seem fine until you need to make a claim.  This is where your costs can take over.  You have been enjoying low premiums and now when you need to claim because of an accident, the costs start to come in.

Many car insurance companies will have in the fine print of your car insurance policy, that you will have to use their specified repairers so to get the repairs done, you will need to comply or pay for them yourself.  A specialized car insurance policy could have a clause that enables you to select the repairer yourself without any penalty as far as cost to you goes.

How To Choose Your Car Insurance Coverage?

To find out about your car insurance coverage, what you are covered for, there is a declarations page in your policy.  Take a look and if you are unsure what it all means, then seek advice from an independent insurance agent, this is the one that doesn’t work for any car insurance company and should have your interests as a client, as the first priority.
An independent car insurance agent has a legal and fiduciary responsibility to provide their clients with proper coverage.

A car insurance policy is just like a legal document, it has wording that is hard for the lay person to comprehend, so seek out someone who can explain, in plain language, what it all means.