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Factors to consider while applying for new car insurance


When you are applying for new car insurance, there are a bunch of factors that you should be looking at, before zeroing in on any particular insurance. This is important in order to keep your overall insurance cost or monthly premium at an affordable level while getting the required coverage that protects you from unforeseen damages or disasters.

The first thing to consider is the need for collision and comprehensive insurance. Liability insurance is the only insurance that is mandated in most states. This encourages people to ignore collision and comprehensive insurance offered by many auto insurance companies in the form of total insurance. These provide coverage against accidents, collisions with immovable objects or damages caused by unforeseen disasters like fire, floods, hurricanes or even acts of vandalism. Therefore you need to decide if you can risk not going for this coverage, especially in those states or cities where the rate of road accidents or natural disasters is extremely high.

The amount of loan amount pending on the new car is another factor that needs to be considered while buying insurance protection. If there is a heavy loan amount, you must keep in mind that the value of the car sometimes depreciates faster than the actual loan amount. In those scenarios, you might come across a situation where your car is totaled but its market value based on the mileage and its condition are actually less than the loan amount you owe. You can take special insurance that covers for such gaps.

What you need and what you don’t is an important part of your decision making process when you are purchasing insurance for your new car. For example, you might need roadside assistance in your insurance coverage if you travel by road very often. Similarly, you might need rental car coverage if you cannot afford to be stranded without your car even for a single day. In such cases the cost of insurance might go up. On the other hand, if you don’t need the bells and whistles, you can negotiate with the insurance provider and reduce your insurance premium substantially. There are some people who buy coverage even for special scenarios like accidents due to the fault of non-insured drivers. Uninsured motorist insurance will come handy in that case. Hence you need to figure out what protection you definitely need and can pay for and what is the coverage that seems superfluous and unnecessary to you.