Car insurance seems pretty straightforward, you pick a provider and pay every month. If you get into an accident then they pay you for the damages when the other driver is at fault. Unfortunately, things aren’t always that simple. Car insurance can actually be a bit complicated.
To make sure that you don’t overpay or that you don’t have enough coverage, you have to know what getting car insurance is all about. In this article, we will go over several things you should know before you buy a policy.
1 – Gap insurance
When you finance a car, whether it is used or new, there can be a time when you are underwater on the loan. This means that you owe more than the car is actually worth. In most cases that doesn’t matter especially if you don’t plan to sell.
However, if you get into an accident and the car is totaled then you won’t get the amount of money that you actually owe on the car. It could end up costing you thousands. Gap insurance is essential if this could happen to you.
Many dealers like King of Cars in South Houston will pay for your gap insurance and then roll the payments into your loan so you can make one payment per month and not worry about insurance on top of it.
You can shop around, of course, and do it on your own if you feel like you can find a better quote.
2 – You could have too much coverage
There are two types of insurance you can get for your car. There is collision which covers when you get into an accident. Then there is a comprehensive which can cover a number of things in addition.
Many times, a car owner opts for comprehensive insurance that covers them for a lot of mishaps thinking that it is better to be covered. However, there are certain comprehensive insurance policies that simply don’t make sense.
For instance, if you live in an area that doesn’t get much extreme weather, then it makes little sense to have coverage for hail damage. Or, if your car is older and you live in a rural area then having theft coverage is probably overkill.
Check your policy carefully to see if there are things you are paying for that you don’t need.
3 – You should shop around
Insurance companies love to poach customers that are with another company. They usually offer incentives to switch providers. If you think you are paying too much, then you can, and should, shop around and see if you can get a quote for less than what you are currently paying.
It costs nothing but your time to check a few other companies. It is best to call as you can often find better deals when you talk to an agent rather than just trying online. The algorithm doesn’t always pick up on certain deals that could be in play.