A new car is a luxury drivers gain only a limited number of times, and owners naturally want to protect their latest acquisitions as much as possible. Choosing the best car insurance, therefore, is very important. There is not a one-size-fits-all approach to finding the best insurance for new cars, but there are specific factors for owners to consider. In this article, Part 1 explains which types of insurance are required by law, Part 2 discusses additional coverage you can get, Part 3 talks about discounts, and Part 4 looks at the role of your credit score.
Part 1 of 4: New car insurance required by law
Regardless of where you live, the law demands you carry liability coverage. This minimum coverage reimburses for damage to other people and property when you are to blame in an accident. It does not, however, cover the cost of medical treatment for any injuries you may sustain or repairs to your own vehicle in an accident that is your fault.
Some states require additional uninsured and underinsured motorist coverage for new car drivers. This extra protection reimburses you when involved in an accident with a driver carrying insufficient insurance or none at all. Check your state’s laws regarding insurance for new cars.
Part 2 of 4: Additional protections for new cars
Beyond the minimum requirements by law, you may also choose to carry collision and/or comprehensive coverage. Collision protection covers repairs to your new car regardless of fault while comprehensive protection covers repairs for other types of damage, such as hail storms or vandalism.
If you are willing to pay a higher deductible, you can often include additional coverage for very little.
Some extras are just that – extra. Weigh your needs against the costs of additional coverage. For instance, if roadside assistance is part of your new car’s warranty, you don’t need to pay for it twice. Similarly, if your family has more than one vehicle, you might want to forego rental reimbursement protection on your new car insurance policy.
Part 3 of 4: Consider new car insurance discounts
When shopping for the best new car insurance, always ask about discounts. Many companies won’t suggest ways for you to save even when deep discounts are available, so you must proactive in securing the best rate.
Cut rates are often available for those with good driving records, and rates typically go down the longer you go without getting a ticket or in an accident. Students and seniors commonly get discount coverage as well.
Part 4 of 4: Best insurance rates and credit score
To secure the best value on your new car insurance – a nice balance between low price and good coverage – your financial behaviors play a bigger role than most people think. Most car insurance companies use credit-based insurance scores to calculate rates. So, drivers with credit cards maxed out and several accounts in collection are going to have a much harder time securing affordable new car insurance than someone who has a good financial track record.
If you are in the process of repairing your credit, be aware that your rates may go down as your credit score goes up.
Finding the best car insurance for your needs and budget is a complex process – one that requires weighing what you are willing to pay and the risks you are willing to take. To further complicate the matter, insurance companies can change policies on seeming whims and rates continually rise. Regularly shopping around for the best new car insurance is time-intensive as well.