Always ask the right questions about your auto insurance
(part 1)
Always ask the right questions about your auto insurance
(part 1)
10 second overview: Do you know exactly what your auto insurance will cover you for in the event of a car accident? Are you insured if a friend drives your car home from a party? If you don’t know the answers to these two questions, then this is the guide for you. In this 2-part series, SmartCitti’s insurance expert, Mark Chappell, shares tips to help you understand the kind of coverage you need from your auto insurance and the essential questions you should ask to find out what’s included in your coverage plan and what’s not.
Your car is more than a mode of transportation. It’s your pride and joy. It’s an old friend. It’s your passion shared among family and friends. Your car is your expression of freedom. When it comes to auto insurance coverage, you want your car protected. Period. If something happens, you want the best auto insurance, that takes care of any claim and gets the damage repaired quickly. But how to make sure you have fully understood what you’re covered for in the event of an accident? The key is to question your coverage and make sure you know exactly what you have signed up for.
Here’s the first six key things you should ask yourself about your auto insurance coverage.
Driving without auto insurance is against the law in most states, apart from Virginia and New Hampshire.
Virginia also has no laws against driving uninsured, but the state requires drivers without insurance to register the car, which comes with a fee. New Hampshire has no mandatory auto insurance laws, but in some cases high-risk drivers must get SR-22 car insurance.
Key question: “Do I really need car insurance?”
"In most states, an active car insurance policy is mandatory,” SmartCitti’s Mark Chappell advises. “If in doubt, check but almost always the answer is YES you do need auto insurance coverage before ever getting behind the wheel of a car. You can call SmartCitti’s agents any time and they’ll be happy to help advise you and set you up with everything fully explained.”
Most states only require drivers to have liability insurance, which protects other drivers and vehicles from accidents, not the policyholder themselves.
If you can cover your car repair or replacement without insurance, or if the car is old with a low value, liability insurance may be enough. Liability insurance, while cheaper than full coverage, increases the financial risk of driving.
Key question: “Is the minimum amount of car insurance required enough coverage?”
“The first question you should ask when insuring your car is who is going to be driving the vehicle” SmartCitti’s Mark Chappell explains. “Undisclosed drivers are one of the biggest issues out there, and can have a huge financial impact for you in the case of an accident. So, ask who will be driving your car and whether they’re also covered and think that if the worst happens what it could cost you and get yourself insured against that.”
A good way to think about how much insurance you really need is what would happen if you had a serious accident where your car is totaled, and you have medical bills to pay. Can you pay those expenses out-of-pocket? If not, full coverage is probably the best bet.
Key question: “How much insurance do I need, really?”
The right amount of insurance and the type of coverage you take out depends both on the individual, and the type of car they drive as well as where they park it overnight and where they live, advises SmartCitti’s Mark Chappell.
“If you have family members or room-mates who also drive your car they need to be declared and insured too,” Mark says. “If your car is very expensive it will cost more to fix or replace than an older, cheaper car and so you may want a really comprehensive policy. Consider all these types of factors and talk them through with a respected insurance agent.”
There are effectively six different types of insurance coverage, but it can vary depending on your insurance provider.
The six key types to consider when buying auto insurance coverage are:
Key question: “What are the different types of car insurance?
Car insurance policies can change quite a bit from one insurance provider to another provider. What you really need is one insurance company like SmartCitti, that works with the best insurance providers to find the right deal for you. However, policies generally fall under six coverages commonly offered by many auto insurers. Call your insurance provider to talk things through to ensure you have tailor made coverage that’s perfect for you and your individual needs.
Non-owner car insurance is great for people who frequently drive cars they don’t own. Perhaps you regularly act as a designated driver for friends, or you drive seniors to medical appointments in their own cars, or perhaps you deliver new cars to their new owners. Whatever your circumstances, there is no once size fits all answer, but non-owner car insurance could be right for you. This kind of insurance is specialized and only offered by some insurers.
In terms of coverage, non-owner car insurance operates similarly to liability insurance in that it only protects the other driver and their car, not the policyholder.
SmartCitti recommends taking out gap insurance when you buy a new car. Always call your auto insurance coverage provider and ask if adding it to your current auto insurance may be the cheaper option. Your car dealership will usually offer it when you’re at the buying stage of the process but they may not offer the best deal to suit your needs.
Key question: “Do I need gap insurance for my car?”
Gap insurance is an optional coverage offered by many auto insurance providers. If a car is totaled but the car’s value is less than the value of your car loan, gap insurance will pay the difference. If you aren’t sure if you need it, call an insurance expert, and ask.