6 Tips When Shopping for Auto Insurance

Posted on Apr 11, 2017

Auto insurance is a necessity of driving. It also serves as a vital safety net when accidents occur – if you have the right kind of coverage that meets your needs. Consider these important tips when you are shopping for auto insurance to help you get the right coverage for the right price.

1) Reconsider Your Deductible

The deductible on your auto insurance is the risk you share with the auto insurance company. The higher your deductible is, the greater your risk. Insurance companies believe that by accepting a larger burden of risk you will take greater caution to avoid accidents so they reward that caution by offering greatly reduced premiums for customers who choose higher deductibles.

The flip side, of course, is that if you are involved in an accident, you will have to pay more out of pocket in the aftermath than if you elected to have a lower deductible.

2) Explore Discount Options and Availability

Auto insurance isn’t always cheap, even when choosing a more budget-friendly policy. Ask if there are discounts available to you that you might not even realize you have. Some companies offer them to people who use certain banks, are part of certain fraternal or community service organizations, and even to people who graduated from certain trade schools, colleges, or universities.

There is one auto insurance company that works exclusively with individuals and families who are affiliated with the U.S. Military – offering outstanding discounted coverage. For the most part, though, you’ll never know unless you ask.

3) Attend to Your Credit Score

A good credit score can make a world of difference when it comes to the cost of your auto insurance, according to Consumer Reports. Some insurance companies do not use your credit history in determining insurance premiums, but many do, and it can make a sizable difference in your annual insurance costs.

4) Make Sure You Have Gap Coverage

Not everyone needs gap coverage, but it can be critical for people who have leases or a car loan that they are paying for. Unless your car is completely paid off, you could find yourself owing thousands of dollars on your lease or loan without this vital coverage because vehicles depreciate so sharply in value over time.

5) Invest in Umbrella Liability

Most states have a minimum liability coverage amount all drivers are required to have. Many full coverage auto policies wrap a certain amount of liability into the policy. However, if you are involved in a single bad accident that results in substantial medical bills or someone’s death, that could be wholly inadequate, leaving you responsible for any judgments that exceed your standard liability coverage.

Personal umbrella liability kicks in when you’ve exhausted your standard liability coverage to provide additional financial security for you and your assets.

6) Choose Vehicles Wisely

One thing that most people fail to consider that significantly impacts the cost of your insurance premiums is the vehicle itself. It’s not all about the price tag of the vehicle, but the risks it represents. For instance, performance cars that are built for speed, often have higher premiums than a similarly priced SUV or luxury car that has advanced safety features.

The more tips you follow when shopping around for auto insurance, the better your odds of finding the perfect combination of cost and coverage will be. These tips will help you get off to a great start.

Otterstedt Insurance Agency has a long history (more than 100 years!) of working with New Jersey (and beyond) automobile owners to make sure their insurance needs are being met while minimizing cost. Contact us today and let us help you get the right auto insurance for your budget and needs.

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