It is important to understand exactly what to expect from a car insurance policy before you begin the buying process. You do not want to deal with surprises when you need to file a claim after an accident or theft. The following 10 questions are an excellent tool to use when comparing policies and premiums.
1. What Happens When the Car is Totaled?
Not every car insurance policy will replace your car or clear the lease that is owed after the car has been declared a total loss. Make sure you ask your agent what a standard policy would cover, especially if you own a car that is less than five years old. Find out if the car will depreciate, and by how much.
2. Are Tires and Other Peripherals Covered?
Most car insurance policies cover the car’s body, engine and glass. Many do not offer standard coverage for batteries and tires. You may need to buy an added coverage package to protect your tires, rims, and battery from expensive damages.
3. Is Gap Insurance Necessary?
Gap insurance repays you for the depreciation your new car experiences during the first two or three years. Without gap coverage, you may be reimbursed less than the total value of your new car when it is declared a total loss. Some insurance companies offer gap coverage as part of their comprehensive policies, but many sell gap coverage separately from their standard policies. It is up to you to find out if gap coverage is available or included.
4. Are Valuable Items Inside the Car Covered?
Generally, a car insurance company is not responsible for paying you back for expensive items that have been damaged or stolen from your car. This includes the car stereo, speakers, or any mp3 player that may be connected to the stereo. If you are concerned about being paid back for interior parts, you will need to find an insurance company that offers a policy that includes personal belongings.
5. Are Group Membership Discounts Available?
Almost every car insurance company offers some discount for people who are members of specific groups. Discounts can apply to members of AAA, credit unions, and other established groups that are affiliated with the insurance company in some way. The qualifying groups are different for each insurance company, so it is important to look at several different companies to see if you qualify for a discount.
6. Is Coverage Available for Transporting Items in Rental Vehicles?
Some car insurance policies will repay you for the loss or damage of your belongings if you have an accident while you are driving a rented car. If you are driving a rental truck, for example, the items that you are carrying may be covered by your auto insurance.
This coverage is not standard from all insurance companies. If you believe that you will need to insure items during transport soon, it is a good idea to look into car insurance policies that specifically state they offer this coverage. You may be able to buy extra insurance if the coverage is not available as part of the standard policies offered by an agency.
7. Should I Buy Coverage for Damage to Rental Vehicles?
Car rental companies always offer their own insurance for their cars during the rental process. Buying insurance from the rental agency is the most effective way to protect yourself from any damages that may happen to the car while you are driving it. Unfortunately, rental car insurance can be expensive, especially if you plan to drive the car over state lines.
If you rent cars often, you may want to look into your choices through your private car insurance company. Many insurance policies provide repayment for damage to rental cars at a more affordable rate than you would receive from the rental company. Your overall car insurance premium may be more expensive, but you will save money in the end.
8. Are There Discounts for Reducing Mileage?
Always find out if there are discounts for finding ways to reduce your daily commute mileage. Many auto insurance companies will reward you for driving less often regularly. You could cut down on your mileage by carpooling or taking public transportation whenever possible.
Reducing the miles that you drive during your commute can save wear and tear on your car, reduce your odds of being involved in an auto accident, and save you money on your car insurance. Most policies have specific mileage rates, so make sure you understand where the breaks are for receiving mileage reduction discounts.
9. Are Rental Vehicles Covered Under this Policy?
If you drive a rental car, you may need to buy added car insurance
coverage through some policies to protect you from the costs when there
is an accident. Research your rental car coverage choices carefully
before you buy a new car insurance policy to make sure that you will be
repaid while driving a rental car. Some car insurance companies require
that you buy more insurance coverage if you plan to drive a rental car
while you are a customer. It is important to understand the rental car
limits on your car insurance policy before you buy a policy.