7 Crucial Details to Know About Car Insurance Before You Buy It

By L. Roberts on January 28, 2020

As we all grow older, one of the most dreadful parts of becoming an adult is having to buy your own insurance. Thank goodness we can stay on our parent’s insurance until we’re twenty-six. But just because you can doesn’t mean you will. Your parents can kick you off their insurance plan whenever they want to! They’ll probably be nice enough to keep you on their health insurance while you’re in school, but the same might not be true for your car insurance.

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Buying car insurance can feel a little bit overwhelming. There are so many different companies and plans, how do you decide where and what policy you should take out? Lucky for you, I’ve put together a list of seven of the most crucial details about car insurance you should familiarize yourself with before you sign on the dotted line. While this list isn’t exhaustive, and you should definitely do your own research, these are some of the most pressing issues when it comes to taking out your own car insurance policy.

1. Cheap isn’t always the best option.

Car insurance can be pricey. And if you’re anything like the rest of today’s millennials, you’re likely looking for the way you can get the best deal. However, when it comes to buying car insurance, cheap isn’t always the best option.

You probably don’t have tons of money – so you probably can’t afford the most expensive car insurance, either. The best way to buy your car insurance is to meet in the middle. Get the best coverage you can for what you can afford.

If you’re a college student and you don’t drive much, it might be possible for you to get an insurance policy through Metromile, a car insurance company that allows you to pay per mile you drive. This is usually tracked by a mobile device or something that actually plugs into your car. I know what you’re thinking — you drive home once or twice a semester, and that’ll end up costing you hundreds. But it’s actually quite the opposite. With Metromile, driving more than 250 miles in one day is free, so it won’t end up breaking the bank.

Paying your car insurance per mile is a good idea if you don’t drive much while you’re a student on campus. Maybe every now and then you go out to dinner with your friends, or you drive to the movie theater a few times a month. If, for the most part, your car sits still in a non-commuter parking lot, paying for your car insurance per mile might be a good idea.

However, if you don’t think paying your car insurance per mile is a good idea for you, you can actually compare available car insurance plans with NerdWallet.com. Put in your zip code, your age, and your current car insurance provider to get a quick quote as far as what’s available for you.

2. Choose a provider that’s reputable.

If you haven’t heard of them – it’s probably not a good idea to even look into opening a policy with them. Think about the fact that you might not always stay in this area, and there’s a good chance you’ll end up going somewhere else when college is over. You’re going to want the company hosting your car insurance policy to be easily reachable. While it’s true that you can always contact an insurance company by phone, it’s actually really comforting to be able to walk into an office and talk to your insurance provider.

Some of the more popular car insurance companies include Allstate, State Farm, and Progressive. If you end up deciding to go with a lesser-known company, make sure you’re willing to deal with the frustrations that come from dealing with insurance companies over the phone only.

There are several car insurance companies out there and available to you – so how do you choose? Let me tell you how you shouldn’t be choosing car insurance. If it’s the first time you’ve heard of a car insurance company, you should probably just keep moving. The company Mercury General was been rated as the worst car insurance provider by Consumer Reports. So while it’s important that you do your research on good car insurance providers, it’s also important that you familiarize yourself with the companies that no one recommends.

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3. Don’t be afraid to compare.

Before you settle on a car insurance policy, do your research. Don’t be afraid to compare several different policies – price and coverage.

Because car insurance is such a personal thing, and it varies in price depending on your age, the number of accidents, and your residence, you should be prepared to go through several different scenarios with a company. Don’t think you’re just going to walk into one insurance company and get a policy in a few minutes and end up going home with the best deal. You should be more than prepared to compare policies between companies.

Have you ever seen a Progressive commercial? Flo is constantly telling us we’ll save money if we switch to Progressive. Most people don’t even spend time comparing their policies to other companies because they simply don’t want to deal with the hassle. If you’re truly interested in getting the “best bang for your buck,” you should be prepared to spend time comparing insurance companies and the policies they offer.

4. Look for add-ons to your policy before you finalize.

Things like gap insurance, personal injury coverage, and comprehensive coverage in case you end up hitting a deer or your car is vandalized. Depending on the amount of coverage you want, you’ll have to choose your car insurance policy carefully. If you have no idea what kinds of things you want to be sure are included, you should talk to someone who has bought and had car insurance for a while.

If you don’t have anyone close to you that you trust to give you advice, check out The Zebra’s “Ask an Agent” service. This is an online service that allows you to chat with someone about your situation and ask any questions you may have about car insurance before you end up purchasing a policy.

Some popular car insurance add-ons include: personal umbrella policies (to cover your assets should you get sued), rental reimbursement, roadside assistance, and mechanical breakdown insurance. All of these options are considered “add-ons” to a policy and are not required. Depending on your state, different levels of car insurance are required (see number six).

5. Pick a premium and deductible that you’re comfortable with.

Some people get confused about the words premium and deductible, so let me help you! A premium is what you’re paying to a car insurance company in order to keep your coverage. There are several ways you can pay – monthly or on a six-month basis. Your deductible is how much you’re agreeing to pay out of pocket before your insurance company will cover you. For example, if you total your car and you have a $500 deductible, you’ll have to pay $500 and then your insurance company will kick in to fix the damages to your car. A lower deductible means a higher monthly payment. If you want to save money on car insurance, consider setting your deductible at $1000.

Your premium and deductible are the most “visible” parts of a car insurance policy – they’re the easiest to understand. When you’re picking out a car insurance policy, make sure that you choose one with a premium and a deductible that you’re comfortable with. Otherwise, you’re going to be unhappy with your coverage.

6. Familiarize yourself with your state’s car insurance requirements.

You want to make sure that you’re abiding by state law and that you can drive legally. Keeping car insurance is important because it insures you if something were to happen – like an accident. Because car insurance requirements are different in each state, make sure you do your homework! You should familiarize yourself with what’s required of drivers in the state where you live.

California requires you to carry the following insurance policies: bodily injury liability coverage, property damage liability coverage, and uninsured motorist liability insurance.

New Hampshire requires you to carry these policies as well as a medical coverage policy per accident.

If you reside in Hawaii, you must carry an additional personal injury policy.

If you try to buy car insurance without knowing the laws for the state where you live, you won’t be able to drive the streets of your city or town legally.

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7. Analyze your driving ability, the kind of car you drive, and your driving habits.

If you’re driving an older car, it’ll impact your car insurance. Likewise, if you go out and buy a brand new sports car, you’re going to be paying even more in car insurance. It’s not just the car you drive – but it’s the way you drive as well. Analyze your driving habits. Have you been in several accidents? Have you had several claims filed against you in the past? There are definitely ways to save on car insurance, but it’s going to require you to “get real” with yourself.

Every time you’re in an accident, your car insurance is likely to go up. We’ve all seen that commercial by Allstate – if you drive safely, you’ll be rewarded and you’ll save money on your policy. Car insurers are trying to find ways to motivate or incentivize drivers to be safer on the road. In the end, when you drive more safely, you end up saving money, but so does your car insurance company.

Buying car insurance can feel overwhelming. If you’re in college, this probably feels like yet another bill you have to pay and keep up with – and yes, it is! Car insurance is important for several reasons: 1) it’s a requirement in your state, 2) it’ll cover you if you end up getting into an accident with damages that total more than your savings account, and 3) it’ll give you peace of mind; if something happens to your car, having insurance means it’s a lot easier to deal with. Problems are much more easily solved if you have a policy that helps you out!

When you go to buy car insurance there are several things you should do: be prepared to compare policy options, do your homework beforehand, and steer clear of the policies that are cheap. You definitely get what you pay for – and when it comes to insurance, you want to make sure you get the best! 

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