The Insider’s Guide to Auto Insurance

Does it ever seem like auto insurance makes as much sense as trying to read Homer in the Greek? There are some important details to know about auto insurance, because auto insurance is important.  Here are some key points.

Buy it!

It might seem like a fairly straight forward concept but the first tip of auto insurance is to actually buy it. Some people say that, “It doesn’t really matter that much if your car is a junker, right?” Wrong! Auto insurance doesn’t just protect your car, it also protects you. Most all auto insurance plans cover injury to driver, passengers and others in case of an accident.

If you get hit without insurance and you go to the hospital, it’s all coming out of your pocket. Then to add insult to injury you will also receive several more fines and tickets for driving without insurance, because driving without auto insurance is against the law. All states require you to have some form of auto insurance, and if you don’t, the penalties can be stiff.

Plus, if you don’t have insurance and you hit someone else, you are then personally liable for all of their damages, including repairing or replacing their car as well as their medical bills.

Don’t let it lapse!

One person sold his one and only car since he mostly took public transit. Naturally enough he also cancelled his auto insurance due to lack of an automobile. Big mistake! A few months later when public transit wasn’t working for him due to a new job, he bought a car and went to get it insured only to find his monthly insurance payments were through the roof. Why? A lapse of insurance. That’s right, the insurance company doesn’t know you sold your car. All they see is that you have a gap in your insurance where presumably you could’ve been driving without insurance. That puts you into a high risk category and allows them to jack up your rates. So do not let your insurance lapse even if you have no car.

Minimums?

If you have gotten or thought about buying auto insurance, then you may have heard of minimums. It is the lowest amount you can pay and get coverage for your car. Remember though that if you buy the minimum you get the minimum, meaning less coverage. If you get into an accident and need to file a claim you could be out of much more money. This is because the less the auto insurance company pays, the more you do.

Combining various insurance polices

Believe it or not, in many cases if you get your auto insurance through the same place you insure, - such as your house, boat, property, or life - you will get a discount on a number of things. The more you insure through an insurance company, the better rates you will get on everything, sometimes up to 15 percent. Many even give you a large insurance discount if you insure a second vehicle with them, too, so don’t be afraid to lump policies together.

Shop around

Just because they sound like a great deal doesn’t mean that there isn’t a better auto policy out there waiting to be found. By shopping the market you can get a better idea of what the going rate is, and if you come back to one you like, you may even be able to negotiate a lower rate. Those quotes they give you are not set in stone and they can work with you to get the coverage you want. Along with shopping around, check and see if your bank or your work has an agreement with an insurance company. If you do business with the group your work does you may get some employee discounts.

Thou shalt not lie!

It seems simple but the difference between getting your car fully replaced in an accident and going to jail for insurance fraud can be as little as one word. Keep in mind that insurance fraud is illegal in all 50 states.

If you are willing to shop around a little for the best insurance out there for your car and budget, you can find a great quote that will cover you and your vehicle. Cars (and you) are an investment and need to be properly protected.  By combining your car, life, and other forms of insurance, you can save many hundreds a year. So shop smart, be honest and keep your coverage paid up to date!