7 Questions to Ask Before Choosing an Auto Insurance Provider

Buying a new car can be deceiving. It seems simple; you pay for the vehicle, drive it off the lot, and live happily ever after. But you have to factor in registration, plates, and most of all, how much insurance costs.

Choosing an auto insurance provider has a direct effect on your bank account. Depending on your insurance provider, you can also get ripped off if you’re in an accident.

So choosing an insurance provider isn’t exactly a walk in the park; it depends on knowing your options for providers.

Here are seven questions to ask before selecting an auto insurance provider

1. Choosing a Mileage-Based Insurance

Many people don’t know about the benefits of a mileage-based program. But a simple call to your State Farm insurance agent can change that.

Mileage-based insurance is perfect for someone who doesn’t use their car often. This type of insurance offers a sizeable discount compared to other coverages.

If you’re only using your car to commute to work or drop the kids off at school, you don’t need a full-coverage plan. Your policy should reflect the usage of your vehicle.

2. Commercial Auto-Insurance

If you use your car to work and not just to get to work, a commercial auto-insurance coverage program is the right coverage for you. Personal auto policies don’t cover if you transport passengers using Uber or Lyft.

So if you plan on Ubering as a side-gig, hold off on picking an auto insurance provider until you see the best commercial coverages.

3. What Kind of Car Are You Buying?

You may not think about insurance when you’re purchasing that new convertible, but you might want to reconsider. Some cars are more expensive to insure than others.

For example, cars with more expensive parts and labor costs are more expensive. New vehicles are also more costly to insure. That’s not all; insurers use tons of data to calculate the risk they’re taking insuring your car.

Some classic cars even require specific insurance. So before you purchase that shiny new Audi convertible, understand the insurance costs you’ll incur.

4. Your Location and Where You Park Your Car Matter

Depending on where you live, your car will have more insurance costs, such as hail protection or rust. It also matters where you park your car. If you live in an urban area, it might increase your insurance costs.

You’re also at a higher risk of theft, so comprehensive coverage might be your best option.

5. Are You the Only Driver

If you’re not the only driver, you disclose that information to the provider. Other frequent drivers should always be listed on your policy. Although it’s rare, the last thing you want to happen is someone else getting your car in an accident and not having coverage because of it.

6. Legal Obligations

States have different laws surrounding liability and collision coverages. Nearly every state requires liability coverage. Regardless, it’s essential to educate yourself on the state laws so you can comply.

Higher levels of liability coverage cover more severe accidents. These types of coverages make sure to include your finances in case you cause a severe collision.

7. Financed or Leased

Owing money on a car or leasing it changes the insurance requirements. You’ll likely have to insure the car for its full value. Collision and comprehensive coverages are best for financed or leased cars.

These types of coverages are best because in case you total your car, you can receive insurance money to put toward another car. The insurance money you receive saves you from having to put your own money toward another car while paying off the existing loan.

Contact an Auto Insurance Provider Today

If you know what type of vehicle you’re looking to buy, it’s wise to have an idea of how much insurance costs. The more informed you are on insurance costs, the easier the buying process becomes, and the sooner you’ll be out on the road.

Choose your auto insurance provider with confidence today.

Choosing an auto insurance provider isn’t the only financial advice our blog gives to readers. Covering topics such as real estate, home renovations, and finance, Newslo is the go-to blog for all your financial questions. Read more of our blogs for your financial well-being today!