What to Consider When Choosing Auto Insurance

Did you know that you cannot legally drive without auto insurance? State laws actually require you to carry a minimum amount of auto insurance. Now you might be thinking of just carrying the minimum amount required because the premiums are typically lower, however this can be a risky move and leave you in a pickle. You don’t want to into an accident and then find out you’re actually underinsured. So what do you need to know and do?

Well when considering the amount and type of coverage you need, there is something to remember- numbers can be deceiving.

  • Example: It may sound like a lot if you are carrying a $100,000 of liability coverage, while it is a lot of money, that amount won’t be able to cover any medical costs if the accident you were involved in caused serious injury. This is especially true if the accident involved multiple people. That $100,000 starts to go quickly when you consider the medical bills, pain and suffering, lost wages, emotional distress, and residual pain and scarring. If you don’t have enough insurance, then that falls on you and your wallet because you would be required to pay the difference between your liability limits and actual costs of an accident.

Here are some important factors to consider when shopping for auto insurance:

  • Uninsured and underinsured coverage: Some states require drivers to have uninsured and underinsured motorist coverage to pay damages you are entitled to if damages exceed the at-fault driver’s limits. Even if it is not required where you live, adding it to your policy can maximize your protection for a relatively low cost.
  • Cost isn’t everything: You should NOT approach auto coverage like a commodity where cost is the only factor. You should actually base the amount you carry on your lifestyle, earnings, how much and where you drive, your overall risk exposure, and some other factors.
  • Personalize your search: We strongly suggest talking with an independent insurance agent about your personal risk exposure. This helps ensure you get the most appropriate coverage for your life and your budget, and it gives you a chance to ask an agent specific questions.
  • Physical damage vs. liability:
    • Physical damage coverage helps pay for repairs to your car following an accident or loss.
    • Comprehensive physical damage coverage goes even further by covering damage to your vehicle that does not result from a car accident, such as if a tree falls on it.
    • Liability coverage pays medical bills and property damage you may be held responsible for if you cause an accident that injures another person or damages their property.

When deciding which option is best for you, take time to consider your budget, financial assets, and risk exposure and select the highest limits you can afford. This helps reduce your risk of having to pay for any costs above your limits in case of accident or liability.

Coverage Options

The goal is to have the best combo of coverage, value, and cost. You can achieve this by understanding the different policy options.

Here are a few common, and valuable, options to consider:

  • Loan/lease gap coverage. With this optional coverage, if the unpaid loan or lease amount exceeds the value of your car after an accident, your insurance policy will help cover the unpaid amount on the loan or lease minus what your car is actually worth today. If you were in an accident without this coverage, you would be responsible for the difference between the actual cash value and the unpaid loan balance.
  • New car replacement. If you have a new car, you may not have enough coverage to get an equivalent vehicle if your new car is totaled. New car replacement coverage will pay either the purchase price to replace the vehicle, the cost of a similar new vehicle, or the market value of the vehicle.
  • Roadside assistance and emergency expenses. Having roadside assistance and emergency expense coverages ensures you can get a tow truck, battery jump-start, tire changes, or even labor should your car break down. Emergency assistance can cover transportation, lodging, and personal property coverage. Much better than being stuck on the side of the road!
  • Pet coverage. We understand that pets are family, too. Pet coverage will help pay for the veterinary expenses if your dog or cat is injured or killed in a collision.

Ask About Discounts

When talking with an independent agent at Nickerson Agency, be sure to ask about discounts. Some ways to save on your premiums include:

  • Maintain a safe driving record. Installing a device or app that tracks your miles, driving behavior, and the time of day you drive can all demonstrate that you are a safe driver and could result in a noticeable discount.
  • Own a home. You’ll save on premiums if you own your house.
  • Package your policies. You can get a discount when you bundle your home, auto, boat, motorcycle, or other policies with a single insurance company. Having just one bill is more convenient too.
  • Paid in full billing. By paying your bill at the start or renewal of the policy rather than monthly, you can reduce your premiums.

To learn more about getting the right coverage for your needs, give the Nickerson Insurance Agency a call today!

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