Planning Effective And Protective Automobile Insurance Coverage
Many drivers don't spend much time thinking about coverage limits and deductibles when choosing an automobile insurance policy. This is often a costly mistake, as a customized policy with appropriate levels will offer the best possible protection for a driver with affordable, reasonable auto insurance costs. Before buying a policy, every driver should understand how different types of coverage will contribute to a policy's overall value and how insurance discounts, online comparison websites and other tools can significantly reduce the cost of an auto insurance policy.
To choose an appropriate amount of coverage, a driver should first consider his or her vehicle and driving habits. Drivers who spend a lot of time on the road will need more collision and liability insurance coverage, while drivers who only use their vehicles to occasionally drive short distances can usually get by with less coverage and higher deductibles. A vehicle's value is another important factor. Expensive vehicles need decent comprehensive and collision insurance coverage. When combined, these two coverage types will pay for vehicle damage in most circumstances. However, drivers with inexpensive vehicles might decide to forego comprehensive or collision insurance coverage. As a general rule, if the cost of comprehensive or collision coverage over a year exceeds 20 percent of a vehicle's value, a driver should look for ways to decrease the cost of coverage or consider dropping the coverage entirely.
There are also a number of automobile insurance add-on coverage types that can contribute to a policy's value. Drivers with heavily customized vehicles should buy custom parts and equipment (CPE) coverage. More general policy options include 24/7 roadside assistance and towing coverage. Add-ons are often a valuable way to increase an insurance policy's coverage, but drivers should fully evaluate their costs and compare rates from different insurance companies before adding these options to a policy.
After a driver chooses coverage types, he or she will have a number of options for decreasing car insurance costs. One of the quickest and most effective ways to lower the cost of a policy is to compare insurance rates. Online insurance tools make this process easy–drivers can enter basic information about their insurance needs and their ZIP code to see quotes from several insurance companies. Checking insurance rates occasionally is one of the best ways to keep auto insurance costs low. Insurance discounts are another option, although discount availability varies from company to company and by location. Still, some insurance companies offer discounts of 25 percent or more for drivers who meet certain criteria. By asking about discount programs and by designing a customized policy with appropriate coverage limits, drivers can stay safe without overspending.