Auto insurance can cover a lot of potential expenses related to your vehicle, from repair bills after an at-fault accident, to vandalism claims, to liability costs when you injure another driver.
But even after you find affordable Nashville auto insurance that suits your current needs, it’s still important to periodically check whether you’re getting adequate coverage for the right price. Here’s how to make sure your auto insurance policy makes sense.
Know What Each Coverage Type Pays For
Start by getting a handle on the various kinds of coverage and add-on options offered with your car insurance:
- Liability coverage can help pay for bodily injuries or property damage that you’re legally responsible for. All drivers should have at least minimum liability insurance to comply with applicable laws. However, minimum liability insurance may not provide adequate financial protection, particularly in a bad accident that leaves others seriously injured or that involves several vehicles.
- Collision insurance can help pay to repair or replace your vehicle after a covered crash, no matter who’s at fault.
- Comprehensive insurance might cover many non-collision related events, such as vandalism, theft, fire or damage caused by certain weather events or falling objects.
- Uninsured/underinsured driver coverage may help in some situations when you’re in an accident with another driver who doesn’t have adequate auto insurance or any auto insurance.
- Medical/personal injury coverage might help pay certain medical expenses associated with an accident. Depending on the policy and applicable state or local laws, it may pay your medical bills or those of passengers, regardless of fault.
Be aware that liability coverage limits are sometimes expressed as a series of three numbers, reflecting the most your insurer will pay for one person’s injuries, the total for injuries stemming from an accident and property damage.
Price the Policy Against Your Vehicle and Use
When shopping around for car insurance, the cheapest auto insurance rates may not reflect the best value for you. Two similarly priced policies may include very different coverage limits, deductibles or exclusions.
Be clear on how much you’d be expected to pay out-of-pocket before insurance payments begin. Your auto insurance deductible is the amount you must pay out of pocket before your insurer will pay any part of your comprehensive or collision insurance claim. While a high deductible can help you lower premiums, make sure you can actually pay the deductible on short notice, as you may need repairs sooner or later and may not want to put it on a credit card.
Review other policy terms, such as add-ons like rental car reimbursement or roadside assistance to determine if they make sense based on cost and how often you anticipate needing them.
Match Coverage to Your Vehicle
You should carry at least state-required liability insurance to legally drive a vehicle. Depending on your lender or lease agreement, you may also be obligated to have collision and comprehensive insurance to protect your car or truck as collateral for the auto loan.
But if you drive a low-value, older car you own free and clear, you may not want to keep comprehensive and collision insurance if it costs about as much to insure the vehicle as it is to replace the vehicle. Be sure to factor in deductible expenses, too. However, you may still want higher than minimum limits to cover damage to someone else’s expensive car in an accident.
Account for How the Vehicle Is Actually Used
Tell your insurer the truth when asked how you use the car and who drives it. Insurance companies may consider your garaging address, estimated annual mileage and other details to determine eligibility or price coverage. Dishonesty at the point of sale could create problems down the road if you file a claim.
Revisit these details periodically. Should circumstances change, you could save money or gain better protection by adjusting your policy. Call your agent if:
- A teenager has started driving the vehicle.
- You move, start working from home or significantly alter the length of your commute.
- Your overnight parking situation changes.
- You use the vehicle for work, including delivery services.
- You install new anti-theft technology.
Compare Consistently and Review Before Renewal
When shopping around or getting a second opinion on your current car insurance rates, request auto insurance quotes for the same deductibles and limits as your current auto insurance policy. Reviewing your insurance declarations page from your current provider will help you compare like with like when you receive competing quotes. Before submitting an auto insurance quote request, jot down key vehicle and insurance policy details, such as accurate annual mileage estimates. Visit https://www.sciencedirect.com/science/article/abs/pii/0001457576900117 for more info.
Reevaluate your insurance needs at least annually or as life circumstances change, from household composition to your finances. Make sure the coverage and deductibles on your policy make sense based on your cash savings and emergency fund. Insurance is intended to protect your savings in the event of catastrophe, so choose limits and coverage that will do that.
