Questions You Should Be Asking about Your Auto Insurance
When purchasing auto insurance, you are usually doing it because it’s required by your state in order to register a vehicle. It’s also great coverage to have in order to protect you, though.
Everyone makes mistakes, even you. Of course, you always hope to be the one not at fault in an accident because then it’s on the other person’s insurance or the other person has to pay for your damages, but mistakes do happen.
In addition, you could end up in a no-fault situation like driving on icy roads or in a parking lot, and the insurance might assign 50/50 blame on both parties. In this case, you want to be sure that things are still covered for your own vehicle.
You purchase insurance as peace of mind. You hope you never have to use it, but if you do have to use it, you want to have enough to cover yourself. You are going to want to keep your premiums as low as possible, though, while also being sure that you’re completely covered. Here are questions you should ask yourself and your insurance company before purchasing a policy.
1. What is the difference between comprehensive coverage and collision coverage, and do I need it?
Comprehensive insurance covers you from things like acts of God (i.e. floods, a fallen tree, or hail) or theft. Collision covers the damage to your vehicle if you hit someone or someone hits you. This is strictly coverage to take care of your vehicle if it’s damaged.
If you have a loan on your vehicle or you are leasing it, then chances are you’re going to be required to have comprehensive and collision coverage on your policy. This is for the lienholder’s piece of mind, but at the same time it just makes good sense if you have a vehicle that’s valued at $20,000 or more.
As your car gets older and depreciates in value to something like $3000, it might not be necessary to have comprehensive and collision coverage on that vehicle. Your premium costs will just be too great over the course of 1-2 years to justify that expense.
2. How high should my deductible be?
A deductible is the money you have to pay out of pocket for the repair of your vehicle if you have comprehensive and collision coverage. The higher your deductible, the lower your insurance premiums will be.
While it’s tempting to go up to say $1000, you need to know if you’ll have that should you need to use your insurance. Typically a $500 deductible is common, but it can go even lower than that. The lower it goes, the higher your insurance premiums go, though. So you’ll need to determine where your sweet spot is.
This is also why it’s good to know the value of your car and if you need comprehensive and collision coverage. If your deductible is $1000 and your car is only worth $2000, then it’s not going to be worth it to have to pay out half of the car’s value to repair it. If your repairs are that high and your car is worth that little, your insurance company might call it totaled anyway.
3. What discounts are available to me?
Most insurance companies will automatically figure in discounts to your insurance such as safe driver, discounts for vehicle safety features, and multiple driver/car discounts. However, your insurance company might offer you others.
If you’re a student, then they could offer you a discount for being a good student and maintaining a B average. On the opposite side of the spectrum there might be mature driver discounts where if you’re over 55 and successfully complete an accident prevention course through your DMV, you can receive a discount.
You can get discounts if you refrain from drinking and smoking. There are discounts if you’re a professional and belong to an organization like the state bar, or medical board, or even a fraternity/sorority. There are discounts for owning a hybrid vehicle, taking a defensive driving course, or even maintaining low mileage on your car each year.
If you have multiple kinds of insurance policies with one company, such as life insurance or homeowners insurance, then you can also qualify for a discount.
4. Does my policy include uninsured or underinsured motorists?
Not all states require that you carry such coverages. If your state does require it, then your agent should know this and include it. If you are in a state that does not require it, though, you can still get it. It’s definitely a coverage you’ll probably want. If you’re in the accident and the other person doesn’t have enough coverage to cover it, or is uninsured, then you will want to be covered.
5. Will my insurer give me original parts for repairs?
Should you get into an accident, you want to make sure that your insurance will pay for original parts on your vehicle in order to repair it, otherwise it will decrease the value of your car.
6. Do I have rental reimbursement?
If your car needs to be repaired and it’s going to take days, then you will want to have a rental car. This is a separate coverage you can purchase on your policy. It can be beneficial to have, as repairs can take a long time.
Knowing what you’re covered for will save you a lot of headache if you get into an accident. Things might not go super-smoothly with insurance for various different reasons, but having adequate coverage will protect you and your financial interests as well.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487
