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Finding The Right Auto Insurance For Your New Car

Before you drive your new car off the lot you need auto insurance. How do you secure the best possible rate for the kind of coverage that you need? Here are six questions to consider in making an informed decision about purchasing your car insurance.

Does my state have auto insurance regulations?

Virtually every state requires you to carry liability insurance and many of them like Florida, also insist you have a no-fault auto insurance policy (PIP). Check with the Office of Insurance Regulation in your state to determine the basic insurance essentials you are required to carry.

How does where I live and how far I drive impact my insurance rates?

If you live in a relatively safe neighborhood your insurance rate for comprehensive coverage (i.e. protection from thieves and vandals) will naturally be lower than if you live in a high crime area. In addition, the type of car you purchase in relation to the lists of cars most frequently stolen will also have also have an impact on your rates. And lastly, the number of miles you put on your car each day can also impact rates. For example, if you commute a few miles a day to and from work, your rate will be lower than if you had a 80 mile round trip commute.

Am I considered a high-risk driver?

If you are under the age of 25 or have a record of being involved in accidents, you may end up with a higher rate than your older drivers who have never had an accident. Insurance rates are based on statistical probability tables and if you fall in to a category that is considered risky, your premiums will automatically be higher.

How much should I pay for my deductible?

The “deductible” is the amount of money that you will have to pay out-of-pocket before your insurance agency will pitch in and cover any costs. For example, if your deductible is $3000 and you just go in an accident that caused $5000 worth of damage, you will have to pay out-of-pocket the $3000 before the insurance company will pay the remaining $2000. As a result, having a low deductible will cause your monthly insurance payments to be much higher than if you had a high deductible.

What type of savings should I maintain? If your new car was totalled could you afford to replace it? If not, then you must include collision and comprehensive insurance to your policy. This in turn would yield you the replacement value of your car if you lost it in an accident of theft.