August 4, 2011

How To Balance Coverages Against Premiums In Auto Insurance Costs

Selecting the right auto coverage options to fit your budget, vehicle and general insurance needs is an important decision for anyone who wants to protect their vehicle completely. Annual premiums reflected in an auto insurance quote are determined by the make, model, year and overall value of the vehicle as well as some personal factors. The annual premium for auto coverage is also affected by the amount of the deductible. If the driver is willing to pay more out-of-pocket, the annual premium will be lower. After picking coverage options, selecting the right deductible is the most important part of controlling insurance costs.

When it comes to buying auto insurance, all drivers must secure liability coverage. However, there are a number of secondary coverage options, including collision and comprehensive, which can drastically increase your insurance costs and annual premiums. Depending on the age and value of the vehicle, secondary insurance coverage may or may not be must-have items. When leasing a vehicle, it is required to be fully insured with collision and comprehensive to protect against all forms of damage. If the car is privately owned, but it's not worth a lot of money, bypassing these coverage options is the best decision. If it is a late-model vehicle that still has a lot of its original value, purchasing collision, comprehensive, uninsured motorist coverage and other options is a good idea.

Once it is decided which coverage options best suit the vehicle and personal needs, adjustments can be made to the costs and annual premiums by selecting a cost-effective deductible. High deductibles ranging from $500 to $1,000 come with the lowest annual premiums. This option is ideal for policyholders who want to enjoy low annual premiums but have the means to easily afford their entire deductible if anything goes wrong. If the driver isn't comfortable paying $500 or more at one time, a low deductible plan is probably the best option. Low deductible plans allow policyholders to have their insurer pay for the majority of their repairs. No-deductible plans and low-deductible plans have higher premiums, but they are best way to avoid substantial out-of-pocket expenses.

When applying for an auto insurance quote, drivers should compare different deductibles. Paying higher deductibles will afford for more coverage at a lower price. Generally, drivers are urged to go with the highest deductible they can reasonably afford. By opting for a high deductible plan, they might secure collision coverage, comprehensive and other benefits instead of choosing only one. Switching to a higher deductible plan makes it more practical to keep the coverage desired while lowering annual costs at the same time.