Car insurance coverage options are not created equal; you need to analyze your situation vis-a-vis the available coverage and choose the best one for your case. The best coverage for your best friend may not be necessarily the best one for you, even if you drive similar car models. Here are a few tips to keep in mind while doing the analysis.
Your Car's Age
A brand-new or relatively new car is best protected by collision and comprehensive coverage. This is because such a new car would be costly to repair or replace in case it's damaged or lost. You can reduce the coverage after some time as your car ages. For example, you can drop collision and comprehensive coverage when the time comes when the coverage rates represent a huge percentage of the car's value.
The Value of Your Car
Even if you have an old car, it may still be advisable to have collision and comprehensive coverage for it if it's an expensive car. A luxury or exotic car that holds its value well need all the coverage you can afford for it even if it's old. After all, such cars have expensive parts and attract high repair bills that you wouldn't want to pay out of your pocket.
The Drivers in Your Household
The type of drivers in your household should also determine the nature of the coverage to buy. For example, teenage drivers are notorious for causing more accidents than other demographics. Therefore, consider buying collision coverage if you have a teenage driver in the house to cover yourself from such risks. In fact, with a teenage driver in the house, you should also consider increasing your liability coverage above the mandatory stat limits.
The Risks Your Car Faces In Storage
Your car doesn't just face risks on the road; it may also be damaged in storage. For example, a wildfire may burn down your garage with your car in it, or a flood may damage your car where it is stored. Then there is also the risk of theft or vandalism in storage. Buy comprehensive coverage to protect yourself from such risks.
Your Risk of UM/UIM Accidents
Some states have more uninsured drivers than others. If you live in such a state, then you should buy underinsured/uninsured motorist coverage (UM/UIM) for your protection. The coverage will come to your rescue if you are involved in an accident and the relevant party doesn't have auto insurance coverage nor has low limits on their liability coverage.
You keep a copy of your insurance policy in your file drawer, but do you know how to read and understand the policy? Having an insurance policy will protect you from losses, but it won't protect you from all losses. To get a better understanding of what your policy will and will not cover, read through this blog. You will learn about all different types of insurance policies and learn the terminology used in the documents that you have read. Hopefully, by the time you have read through the content here, you will know exactly where your insurance policies are lacking so you can make changes.