Three Tips To Consider When Purchasing Auto Insurance

Posted on: 6 April 2016

As a driver, having auto insurance is important to ensuring that you and the people you share the road with are protected. Without auto insurance, not only will you have to pay out of pocket for damages and injuries you may have caused, but you can also be subject to paying hefty fees for not having the minimum amount of insurance required by law. If you are purchasing new auto insurance, here are three tips to consider:

Assess Your Financial Situation:

The type of auto insurance you are going to benefit from most depends on what your financial situation is like and the age of your vehicle. Those who don't make a whole lot of money and own an older vehicle should consider an insurance policy with a high deductible and lower monthly payments. They also should consider only liability coverage instead of adding additional coverage onto the policy. This is because an older car that is involved in a car accident will likely be better off being replaced instead of paying high amounts for repairs. However, those who own a newer car and make a decent amount of money will be better off with lower deductibles and higher monthly payments. This way, their newer car can definitely receive repairs. 

Ask Your Lender:

If you do not own your car outright, you are probably going to have to get the amount of insurance coverage that is required by your lender. A lender will probably want you to have both liability and collision coverage to ensure that their investment is protected. Be sure that you review the paperwork signed with your lender to ensure that you are receiving the right type of insurance for your vehicle. If you do not have the right type of insurance, your lender may require you pay a fee or they may even tow the car until you are able to provide proof of the right insurance amount.

Get Gap Insurance:

If you do not own your vehicle and are still making payments on it, it's important to consider gap coverage. Gap coverage is going to protect you in the case that the vehicle is totaled. In this situation, your insurance will only pay the market value amount of the vehicle to you, which is often times significantly less than what you still owe on the car. Gap insurance is going to ensure that what you owe additionally on the car is covered so you are not paying for a car that you no longer own. 

When you consider these three tips, you can receive the best coverage possible and ensure that you are well protected.