Choosing an auto insurance coverage involves a lot more than what many people assume. If you pick an insurance policy at random, you will end up with a policy which is expensive but doesn’t give you all the insurance coverage that you really need. There are some simple steps involved in the decision making process of choosing your insurance coverage. This will maximise your safety and optimise the premium that you are paying to the auto insurance company.
The first step would be to evaluate the value of your car. The insurance premium you should pay and the coverage you should look for should be determined by the value of your car. If yours is a brand new car, with an auto insurance loan payment pending over the next 5 years, it is good to get the car covered for collision and comprehensive insurance along with the mandatory liability insurance. This will take care of all the damage costs of your car in case of an accident or natural catastrophe. However, if your car is a classic model, without an auto loan and is very old, you would like to reconsider the strategy. There is no point in paying a high premium for comprehensive coverage or collision coverage, given that an accident would leave your car in a virtually irreparable situation. In such cases, the coverage you get will also be less as your car wasn’t worth much before the accident. So you could avoid paying a high insurance. The same holds for totalled car insurance. This should be high if your car is relatively new and could be avoided if it is very old.
You would also do well to consider the usage of your car combined with the area in which you are planning to use. A lot of people tend to ignore these two factors when it comes to insurance. Some areas are prone to floods, cyclones or landslides, in which case comprehensive coverage is useful, especially if your car is new. If you drive 30 miles every day to reach your office, that too, on the highway, you need collision insurance as well as personal injury protection as the accident risk is much higher on the highways. The same holds for mountainous terrains too. In cities, you are likely to find people with liability insurance, but in areas where traffic rules are not strict, you might want to have an insurance coverage that provides costs of damage when other party doesn’t have liability insurance.
