Car insurance is never an enjoyable thing to think about. It’s one of the largest ongoing expenses that comes along with owning a car.
As a driver, you’re legally obliged to have car insurance. It’s necessary to have before you’re able to drive your new car away from the dealership and being caught driving without insurance can lead to some serious consequences, including the revocation of your license and a hefty fine.
Learning about car insurance can be complicated but it’s necessary to know the basics. This way, you know what to look out for when you are purchasing new car insurance.
Why Do You Need Car Insurance?
Just like home insurance or life insurance, your auto insurance will protect you. Car insurance works to protect you on the roads and it is a legal requirement.
If you collide with another vehicle or somebody bumps the back of your car, it will decrease any associated expenses, such as car repairs. Some insurance policies also cover claims from other drivers if they’ve been injured in a collision with your car.
What Should You Consider When Choosing a Car Insurance Company?
There are several factors that determine which insurance company is going to be the best for you. When searching for a new car insurance policy, take into account the following factors.
- Positive company ratings and reviews, such as the State Farm insurance reviews
- Credible company reputation
- Affordable prices
- Breakdown cover
- Additional bonuses and benefits
What Are the Different Types of Car Insurance?
There are several types of car insurance, each other which offers a different amount of coverage. The three main types are
- Fully comprehensive – the highest, often most expensive level of car insurance that covers you, your car, and others involved if you crash. It can cover expenses for car repairs, medical bills, and vandalism to your car.
- Third-party – the lowest level of coverage that covers the costs of damage that you cause to other drivers or motorcyclists, their vehicles, or their property.
- Third-party, fire, and theft – this type of insurance covers other damage to people but not to you. However, it does cover you if your car is stolen or catches fire.
Which Type of Insurance is Best for You?
If you are happy paying a premium price knowing that you are fully covered in the event of an accident, taking a fully comprehensive insurance policy is the best option. This coverage might also allow you to legally drive another person’s car so is beneficial for couples or families with multiple vehicles.
Third-party coverage options are the most beneficial if you don’t currently have a no-claims bonus or you live somewhere that has a high crime rate.
They might also be helpful if your car is worth less than a few thousand dollars and you are able to cover most of the potential damages to your vehicle in the event of a crash.