Nothing compares to your “first set of wheels”, no matter how many years that you are a vehicle owner. Everyone remembers their first car, whether it was a hand-me-down from Dad, or an old clunker you got dirt cheap that ran.
The biggest downer about owning your first car, or your current car for that matter, is not the amount of money you must pay for maintenance and gas for the vehicle, but the funds you expend to insure it.
But today’s cars are not your Dad’s car from back in the day. He may have just buffed out a mark where someone keyed the car or nicked the bumper. Today, just a wayward grocery store cart that slammed into a tail light or a minor or major collision may not only mess up the exterior of the car, but the electrical system may also be in peril too, thus repair costs will skyrocket. That is why you should be wise about what type of coverage you need for your vehicle.
Picking and choosing your automobile coverage
Most automobile insurance companies structure their statements so that the premiums are paid on a twice-yearly basis. The primer below will discuss types of automobile insurance coverage, and, conferring with an insurance agent like John Savadjian, an insurance broker in New Jersey will help you to gauge just what type of insurance suits your needs. John Savadjian can help you select the exact type of insurance that is vest for your needs.
There are some components of your auto insurance that you really don’t want to do without, and, for other components you can pick and choose, particularly if your vehicle is older, or you are really trying to cut costs.
Reduce your insurance premium
But, before we delve into the types of insurance coverage available, it does behoove you to check to see if you are eligible for a cheaper premium rate based on the amount of miles you drive yearly. For example, if you don’t use your vehicle to commute to work, or you carpool and are not a driver, you might be able to receive a discount based on the car’s limited mileage. You also may get a cut-rate premium if you have other vehicles or persons in your family who insure their vehicles through this auto insurer, thus getting you on some type of “family plan”. Likewise, if you insure your home through the same insurance company, you usually get a discount. Some, but not all, insurance companies will give you a discount for other criteria like:
- Using anti-theft devices;
- Using seat belt restraints;
- Being a college student away from home or a student driver with good grades;
- Having taken a defensive driving course or professional driver’s education course;
- Having a good credit record;
- Choosing a higher deductible;
- Being a long-time customer; and
- Not having accidents or moving violations for three years.
The major components
When it comes to insurance, after an accident it is not just the state of the vehicle that may be worrisome – an accident’s medical injuries might be expensive as well, especially if you have not factored medical expenses into your premium coverage. This is why it is best to speak with an insurance broker, like John Savadjian, who will assist you in finding the most-comprehensive insurance plan.
In many states, car insurance is a legal requirement before you can drive your car out on the road. Here are the seven most common types of auto insurance and some of your options to help you select a premium plan tailored to your needs:
- Liability insurance is the most-important coverage for your vehicle. In states which require that you carry auto insurance coverage and stipulate the minimum requirement for that coverage, liability insurance is the type needed. If you are involved in an accident, and the police determine you are at fault, having liability insurance in place will cover the cost of repairing any property damaged in the crash (such as cars or buildings), as well as the medical bills from resulting injuries. If you can swing it, go beyond the minimum-required amount of liability coverage to ensure you are covered for claims that exceed that limit and thus risking less out-of-pocket expenses incurred by you in the long run.
- Collision insurance is also a necessity because liability insurance only covers damage incurred other than to your own vehicle. By including collision insurance in your automobile policy, you are guaranteeing that your insurer pays for the repairs needed to your car. Additionally, if your vehicle is totaled in an accident, a collision insurance policy will pay out the value of your car at its worth at the time of the accident. If your car is older, you might be tempted to take the collision insurance portion off your policy, especially if you have the means to replace the vehicle, but, it is imperative to have collision insurance if you drive a newer, or more expensive, vehicle.
- Comprehensive insurance is important in its own right, because there are more pitfalls besides accidents that can happen to your vehicle, such as theft, an animal collision or weather damage, to name a few. With comprehensive insurance in place, your car is “good to go” no matter the situation encountered. Some vehicle insurance policies give a discount for comprehensive insurance based on whether you have an anti-theft and/or tracking devices in place.
- Uninsured motorist protection is a boon for those drivers that are involved in an accident, but are not at fault. Though the law may require drivers to carry insurance, their policy may not cover all the expenses that you, who are on the receiving end of this accident, will end up paying. Even with uninsured motorist’s protection in place, if the “other driver” doesn’t have the insurance necessary to cover your damages, he still has an obligation to cover your expenses above and beyond what the insurance pays, or out of his/her own pocket.
- Medical expenses and personal injury protection coverage will help out with any costs incurred as a result of post-accident treatment. With this type of insurance component, no matter who is at fault, the medical bills will be covered for you and your passengers. The exception to choosing this type of insurance is if you have fairly comprehensive health insurance in place.
- No-fault insurance is a type of insurance that is only available in twelve states and New Jersey is one of them. Basically, this means that when a New Jersey driver is involved in an automobile crash, the driver must rely on his/her own vehicle insurance policy first to pay medical bills and other expenses related to the crash. With no-fault insurance protection, any injuries and damage is covered, no matter who is found to be ultimately responsible, or at fault, for the accident.
- Gap insurance is a type of insurance available if you are still making car payments. It is meant for drivers who still owe money on their vehicles and need to pay off the vehicle if it is totaled in an accident. Gap insurance is recommended if you owe more on your car than you could easily pay off on short notice. Please note that some lenders may require that you have gap insurance in place until your vehicle is 100% paid off, so you might want to check your loan paperwork before adding this component to your car insurance coverage.