Setting up your auto insurance policy can feel complex, especially if you're trying to strike the right balance between coverage and premiums. There are, however, a few things you can do to right-size your policy.
Know Your Limit
The main argument for paying for insurance is to place a cap on how much you'll pay if something happens. Every auto insurance provider will impose a deductible on a policy. The deductible is the amount you'll have to pay before your insurer will pay anything.
A higher deductible should yield a lower premium. However, you don't want to have a $1,000 deductible if you can't confidently fork over $1,000 if an accident happens. One of the keys to right-sizing your insurance policy is to pay the highest deductible possible within your emergency budget.
Bear in mind that a higher deductible will leave you on the hook for smaller incidents, too. If you need $350 because a driver clipped your mirror, for example, a policy with a $500 deductible won't cover any of it. The insurer only pays the portion that exceeds the deductible.
Some drivers have significant risk exposure. If a person drives every day in a congested downtown area, for example, there's a greater risk something will happen to their car. Worse, there's a higher risk they might be at fault for an accident. Someone driving regularly in this sort of situation should consider carrying full coverage to reduce the risk that an accident will leave them on the hook.
Notably, comprehensive coverage becomes more valuable the more risk exposure you have with a vehicle. Comprehensive policies cover incidents other than collisions. If you park your car under a tree, for example, it's probably wise to carry comprehensive coverage.
Number of Vehicles
If you have multiple vehicles, your auto insurance provider will almost certainly offer a multi-vehicle discount. Conversely, you might be okay with carrying less coverage on an older vehicle that you don't drive as much. Generally, you should try to find a discount that provides the most coverage for as many vehicles as possible within your budget.
Other Types of Insurance
Many insurers are happy to bundle other types of insurance. Home or rental insurance, for example, are excellent options for bundling. If you're going to insure other items, such as a boat, you're probably going to be further ahead to bundle them with your auto policy for a discount from a single insurance provider.
Contact an auto insurance provider for more information.Share
25 July 2022