Nearing the end of 2020, we look back at a year that brought us great turmoil. The pandemic and subsequent lockdowns weakened every economy worldwide and landed many people in financial hardship. While most people’s income was reduced, everything became more expensive overnight.
It’s now, more than ever, vital to cut down on costs wherever you can. An excellent place to start is by having your car insurance reassessed. People often settle for the coverage suggested by the dealership that sold them the car and never bothered to look at the policy or alternative options. This typically results in paying too much.
In many situations, options are added to your policy that you may never need. Cutting these from your coverage can potentially save you a substantial amount of money. However, be careful. In an article they wrote, the professionals at BrokerLink explain that opting for minimal coverage may not be the best choice.
So, let’s look at some of the ways by which you can safely cut your premiums.
Choosing the Right Amount of Coverage
Every car insurance policy consists of various coverage types, all offering different forms of protection, and, in some states, having vehicle cover is legally enforced. These mandates only require you to buy a minimum amount of surety, though.
However, the minimal cover is seldom adequate. Thus, it makes sense to buy extra coverage that’ll protect you more extensively. Knowing what every component offers and understanding your needs is vital to choosing the right amount of insurance.
The insurance components that typically make up a full coverage auto policy are explained below:
- Bodily injury liability. Pays the other party’s medical bills if they’re injured in an accident, which was your fault.
- Property damage liability. Covers property damage as a result of an accident you’re responsible for.
- Underinsured or uninsured motorists. Covers the costs of an accident incurred due to someone who has little or no insurance.
- Collision. Pays for damages to your car regardless of who caused it.
Car insurance typically has various additional coverages that you can add to your standard policy. These include:
- Safety glass breakage.
- Roadside assistance. If you’re an existing member of the AAA or similar club, this isn’t necessary.
- Rental car reimbursement. If you can’t afford to not have a car due to work or other purposes, this is a must. While your vehicle is out of commission, your insurance will pay for a rental.
- The associated legal costs. This component covers many unforeseen expenses incurred due to an accident, such as interest on damage payments and court overheads. It also entitles you to a daily fee to cover lost wages should you need to assist your insurance company with further investigations.
- Gap insurance. This add-on covers the difference between your vehicle’s depreciated value and the total amount you still owe on its loan or lease. Should your car be written off due to an accident or be stolen and not recovered, this type of coverage is invaluable.
Deciding on an Insurer
When buying car insurance, various factors should be considered. Many companies offer dirt-cheap plans. Yet, when it comes to claims, they take forever to finalize and often pay out much less than is needed to cover the damage.
Thus, it’s vital to check ratings from third-party reviewers and consider the following factors before you sign a contract.
- Customer service quality
- How efficiently claims are filed
- How long they take to finalize a settlement
Shopping around and getting multiple quotes online or through an independent broker is essential. You’ll often find two insurers offer the same amount and quality of protection at significantly different rates.
To Wrap Up
Having car insurance, whether it’s legally required or not, isn’t an option. However, overpaying for it can be prevented. By regularly having your policy re-evaluated and comparing quotes from different companies can end up saving you a considerable amount of money.
Defining your needs and choosing only applicable additional cover puts you on the right track toward finding decent and affordable insurance for your vehicle.