Auto insurance is one of the most important financial decisions all drivers must make yet it is the least understood. There are no classes available to help drivers understand auto insurance policies or how much coverage is needed. This guide attempts to help by giving the reader 10 questions to determine if full auto insurance coverage is needed.
1. Do you drive and own a car?
Each state requires car owners to place a minimum amount of insurance on their vehicles. All auto insurance companies are aware of the minimum coverage for your particular state and minimum coverage is included in a basic policy. Full coverage includes comprehensive (covers against theft and damages other than a collision) and collision (covers in case of an accident).
2. Do you have a car loan?
Although comprehensive insurance is not required by law in any state the lender will require comprehensive insurance in order to protect their investment until the car loan is paid in full.
3. Are you paying the least amount for the best coverage?
The second highest expense after the purchase price of a car is the insurance coverage. It is possible to save a substantial amount of money on car insurance by comparing coverage and costs between policies.
4. What is your car worth to you?
Comprehensive insurance is covers your car in case of theft or damaged by natural disasters such as fire, flood, earthquake or wind. The insurance company will determine the value of your car and then make an assessment of repair or replacement costs. You can determine your car’s worth through the Kelly Blue Book.
5. How much is it worth to the insurance company?
To determine what the insurance company will pay you if your car is stolen or totaled you will need to make the following calculation.
• Find your car’s value in the Kelley Blue Book.
• Subtract your deductible.
• Subtract the balance of any car loan.
• This is what you will receive if your car is totaled.
6. What is your car worth to a car thief?
The 10 most stolen cars in the US are more than 10 years old. Don’t rush to eliminate comprehensive insurance on your car because it is an older car. If you can’t replace the car you may want to keep comprehensive coverage.
7. Are you a safe driver?
You may think you’re saving money by dropping comprehensive coverage because you haven’t caused an accident in 20 years. However, if you are a victim of car theft or damage other than an accident you will have no insurance coverage.
8. Where do you live?
The likelihood of a collision in an urban area is much greater than in a suburban or rural area. You can save on full auto insurance coverage if you do very little city driving with a higher deductible.
These 8 questions can be a starting point in determining if you need to pay for full auto insurance coverage. Knowing what you need and paying the correct amount of auto insurance is one of the best financial educations you can obtain.
It is always important to stay informed about insurance and financial news especially when you are looking to purchase auto insurance Ontario for your vehicle. If you are a Canadian resident living in Ontario and are looking for Ontario auto insurance, you should go online to compare quotes offered by various insurance carriers so that you can get the best price.
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