How To Buy Car Insurance | 4 Besr Steps

Are you confused about car insurance? In this article I'm going to walk you through the exact steps to figure out that how much car insurance you really need? And spoiler alert you have the potential to save big money.

So let's talk about how much car insurance you really need.

Step one you need to understand the three types of car insurance coverages available. That includes liability, comprehensive and collision.

Okay so, Liability coverage liability insurance covers any bodily injury or property damage when you have an accident that is your fault. In other words, If you were to hit somebody. Your insurance would cover the cost of the repairs to that car or if you caused any harm to the person like a physical injury. Liability insurance, this is the basic type of insurance that everybody needs it's illegal to not have this type of insurance. So make sure you have it. Bodily injury liability thinks of this as medical cost. Property damage liability thinks of this as the cost of the repairs to the car.

Comprehensive insurance covers any kind of repairs to your car that did not result from a collision. Let's say your car got broken into a tree branch fell on top of it, your car caught on fire unexpectedly from a natural disaster. Hailstorm came around any of those things would be covered by comprehensive insurance. And the last type of insurance number three is the collision insurance.

Collision Insurance
collision insurance covers the cost of repair for your vehicle if you are involved in an accident. And it doesn't matter whose fault. It is whether. It is the person who hit you or you hit somebody else. Collision cowlage can cover the value of repairs to your automotive. Your own liability insurance does not cover the cost of repairs towards your car unless the other person is at fault. And then their liability insurance would cover the cost of your repairs. And let's say that other person didn't have enough liability insurance to cover the cost of your repairs. This is where collision coverage would help you out.

One important thing to note here is if you have a car loan you may be required to have full coverage. Which means all three types of insurance on your car. So, While you may not have the opportunity to pick and choose the different types that you want. You do have the option to shop around different insurance companies to get the best rate.

Step two you need to determine how much car insurance you need. I will say this it is a really good idea to maximize your liability coverage. Now generally most insurance companies will max out in three different areas. This would include personal injury, total injuries per accident and property damage. So, When you go into your insurance coverage you can log on to your account you should see three different numbers. The max generally for personal injury is $250,000 the total injuries per accident is $500,000 and the property damage max is $100,000. Now I wanted to show you guys exactly what type of insurance.
How To Buy Car Insurance | 4 Besr Steps
I'm carrying with my 2015 Subaru Forester. So, You can get an idea. But I have maxed out bodily injury and property damage liability - those exact numbers - 5500 and 100. So, It's a good idea for you to max this out. If your numbers don't match mine and to give you an idea of how this would impact your premium. I went ahead and went inside of my insurance coverage. And I did some changes hypothetically to see how it would impact my rate. So, Now I could select from the 250 500 100 and let's say that I just dropped it down to half. That 100 per person, 300 per accident and 50 per accident. And what that does for my car insurance premium. So, You can see it actually reduces my premium from 215 dollars and this is paid out every six months to a hundred and ninety seven dollars for a six month premium. So my premium overall would drop $14 and 78 cents if I switched within my policy period. But If you look at the effect of the entire six month period because I pay car insurance every six months. Which we'll talk about how that saves you money as well that's the difference between 2:15 and 197. And it only changes my six month premium by $20.00. So let's get this straight cutting my liability in half only saves me $20 for six months. So, It only saves me three dollars and 33 cents per month. I don't know about you but paying just three dollars extra to literally double my liability. I think that's a pretty good deal so maximizing your liability insurance is key.

LIABILITY - MAX OUT TO $250/$500/$100
Next you're going to take a look at your comprehensive coverage. It's pretty inexpensive to add so I would suggest including this as well here's a very important note about comprehensive and collision coverage raise your deductible. If you have one thousand dollars in euro ship fund that's set aside for emergencies. If you have at least one thousand dollars in savings raise your deductible on your comprehensive and collision coverage. And Just for kicks I'm going to show you what happens when I reduced my deductible from $1,000 to one hundred dollars. Okay remember comprehensive insurance covers any repairs to your car that did not result in a collision. So, These are things like natural disasters theft that sort of thing. So, When I went into progressive and I changed my comprehensive deductible from $1,000 to $100. That was a difference between paying twenty three dollars two pain seventy six dollars. It actually is a big difference because it costs me fifty three dollars more. The change raises my premium from three hundred and eighty dollars every six months to four hundred and thirty three dollars. So That's a difference of about eight dollars and eighty three cents additional per month or one hundred and six dollars per year. A great way to save even just a hundred dollars per year in my case is just raising my deductible.

Now Let's see how changing the collision deductible from $1,000 to $100 changes things. Okay, So this is insane, But When I changed it from a $1,000 deductible for collision coverage. which was one hundred and five dollars for a six month premium rate dropping it to one hundred dollars increased my premium to two hundred and ninety dollars. That's insane, this by far is the biggest swing impacting my premium, by lowering my car deductible from $1,000 to one hundred dollars. I effectively increased my premium. Basically, the money that you pay towards the car insurance company just to keep your car protected. I went from a three hundred and eighty dollars for a six-month period to five hundred and sixty-five dollars. That's a difference of three hundred seventy dollars per year. If you do anything if you take away anything from this article, I highly suggest that you increase your deductible on your collision insurance to one thousand dollars. So you're probably wondering why is that such a big difference in lowering in a lower collision deductible than a higher one. Well, what you are basically telling the insurance company is that you are willing to take on less risk. If somebody hits you to pay for that out of pocket repair costs then the insurance company. And the insurance man be like oh you don't want to pay more for the collision coverage then we're gonna charge you more. Because you are a more risky customer to us and we're afraid that somebody's gonna hit you and you're not willing to pay more upfront out-of-pocket costs. That's why it's so important to have at least $1,000 in your emergency fund this is the oh-shit fund that I keep talking about because if you have at least that much money you have the opportunity to save yourself some mega bucks on your insurance premium.

Okay so step three is to get multiple quotes from multiple car insurance companies. So, You're going to have to do a bit of legwork to shop around but now you know what to look for right liability you are going to max out in my case. It was 250 500 100 you're also going to opt for comprehensive and collision coverage with a $1,000 deductible in each got it. Then you're going to request and put that out there to different insurance companies. Now, I recently used a tool called Gabby that's And what I did was I downloaded my coverage policy from progressive I uploaded it into Gabi's system. And I said keep my coverage the same for you you might opt to change your coverage to what I listed out. And Then they're going to email you and say hey these are all the car insurance company quotes that we selected for you that could be a good fit. And Then you can opt to choose to switch through Gabby. It's really simple I'm going to drop my link below so that you can sign up and see how it goes. Because I had already maxed out my liability and my deductible is for comprehensive and collision. I actually was told by Gabby that I was getting a good deal. So I didn't make any changes and then they're just going to keep that on record. so that, if there was a new quote from another insurance company they would be able to notify me and then I can make a switch. You do not have to be brand loyal to these auto insurance companies. They don't care they want your money and what I really like about this is I'm okay switching. so that I can get the best deal and the best coverage.

Okay once you get the multiple car insurance quotes and you're able to make some adjustments. Step four is optimize your car insurance to get the best rate. Now one thing that I really liked about progressive and I know a lot of other car insurance companies do this is you can bundle other insurance policies with car insurance. so with progressive, I bundled my renter's insurance and auto insurance into one and we get a slight bundled discount. My other trick to saving money on car insurance is opt to pay the six-month premium rate instead of the monthly rate. When you pay the monthly rate you're actually paying slightly more than if you were to pay the six-month rate. In my case, my monthly rate was 72 dollars and my six month rate was three hundred and eighty dollars. Well, When you divide the three hundred and eighty dollars out by six months it only ends up being sixty three dollars. So that's a difference of nine dollars that I'm saving or a hundred and eight dollars per year. And I don't know about you but I'd rather save that one hundred and eight dollar for something really nice. A really quick trick to do this is simply add in that six-month premium to your budget and budget out for it monthly. So, It still feels like I am paying my car insurance monthly but instead of giving it to the insurance company. I'm just setting it aside in my account and then when that six month is due, I will go back in pull that money out of my account and pay for it. Because I've already saved up for it monthly.

I want to mention a side note here. Your car insurance premium is impacted by your driving history. so if you've been involved in accidents in the past and recently that could impact your premium rate. So. Ttake that as a caveat fortunately knock on wood my husband and I have not been involved in an accident. I think since we were married. We're really safe drivers I have to say also if you have an older vehicle your car insurance premium might be a bit higher. That's because insurance companies seem to think that older cars are less safe. I don't know about you but I drove a 2002 Ford Escort zx2 for 1112 years. and it was really safe. Kyle had driven a 2003 Jeep Grand Cherokee and what was really interesting about that is when we moved to California the insurance premium was 492 dollars for our six month premium. And then when we bought our 2015 Subaru Forester in cash. Our insurance premium dropped from 492 to 380 because it was a newer vehicle. All right so to recap all this I know I unpacked a lot of stuff for you. But in order to know exactly what car insurance you need is remember the three types of car insurance types liability, collision, comprehensive. Your liability you are going to max out 250 500 100. Your comprehensive and collision raise your deductible to $1,000 each. You're going to get multiple quotes from multiple companies and make the switch you're going to optimize pay the six-month premium as opposed to the monthly premium. And see how you can bundle other existing insurance policies.

Drop me a comment below was this article helpful was it more confusing I'm going to also link my blog post so that you can see the written steps so that you can pull that up side-by-side as you're working on changing your car insurance so that you can save money I'd love to learn how you're saving money with the strategy and these insta actions.


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