If you’ve never made a compare insurance rates before, you might feel lost. You might even think that it doesn’t make sense to compare your insurance because you are already covered to the highest extent by whatever company you have. You don’t need to be saved with a rate that is more than you need. It is important to keep in mind what is covered and what is not when you’re choosing insurance, and this means getting rid of all the hype and fancy lingo that insurance companies use to describe their plans. There are three things you need to understand when comparing insurance:
What is a deductible? This is the amount of money you will be responsible for paying out of pocket should you need to file a claim. Some insurers have a deductible as low as $50 per accident or injury, but most have a higher deductible. The lower your deductible is, the less you’ll pay for your insurance coverage. The higher your deductible, the more money you will have to fork out each year.
Why is a deductible important? A high deductible means you will have to shell out a lot of out-of-pocket money before the insurer will start paying off any claim. The lower your deductible is, the less you will have to pay and the more you can save on your insurance premiums. Knowing how to compare car insurance rates and deductibles is the first step in saving money.
Is a good credit score important? While your credit score is certainly not going to impact your ability to pay your insurance, it is something that can greatly impact how quickly you are approved for a claim. Insurers tend to give more approval to those with better credit scores. While this may be true now, there is no guarantee that it will remain that way.
How about comprehensive coverage? This type of insurance is designed to pay for damage to your vehicle after an accident. It is important to note that comprehensive coverage is only available on new cars. If you currently own a four-door sedan, then you are probably going to want to focus on getting collision and comprehensive coverage as opposed to just liability. Being a good driver is a great way to ensure that you will not need to purchase additional collision insurance to get comprehensive coverage on an older vehicle.
One last thing to think about when comparing insurance is the actual cash value or replacement cost of your vehicle. The insurer will typically offer you a replacement value. However, while this may be an attractive price, remember that this is not the same as the actual cash value. Actual cash value is what your vehicle would be worth after a covered accident.