Anybody who owns a car cannot overlook the need for a good auto insurance coverage. It is always a challenge to ensure you get the right type of coverage for your car without over-riding the budget you have set aside for this purpose. However, you can achieve this balance if you are aware of the factors that have an impact on the insurance premiums and vary it accordingly so the cost fits your pocket.
Type of coverage
The type of coverage you are looking out for your car is the main factor that determines the premiums. If you are looking out for collision or comprehensive coverage, you will have to be prepared to pay a huge amount. But, if you are looking out for basic coverage that covers the state specified minimums, then you can get them at reduced prices. Before determining the type of coverage, you will have to take the car and the person who is going to use the car into consideration. If the value of the car is high and is being used frequently, then you should opt for a higher level of coverage. However, if the car is old and does not have a high market value, then you can settle for the basic coverage.
Deductibles
The deductible is the amount you will have to pay upfront for damages before the insurance company processes the claim. The deductible that you opt for also has an impact on the amount that you will have to pay for the coverage. If the deductible amount is low, then the cost of the coverage will be high and as the deductible increases, the cost of the policy decreases. Before increasing the deductible, you have to consider if you can pay up that amount before the insurance company disburses any funds in case of any mishap. If you cannot afford high deductibles, it is wise not to opt for it just to keep the costs low.
Monthly or yearly premiums
If you opt to pay the premium on a monthly basis, then the cost of coverage will be high. If you opt to pay it yearly, you will get a small discount. You can also consider paying the premium once in three months or once in six months, which will reduce the cost as compared to the monthly premiums, but it will still be higher as compared to yearly premium.
