A Guide to Help you Purchase Auto Insurance Smartly!
1. Find a quality and reputable auto insurance company (Like Farmers!): Never buy any insurance with a company you never heard of. Since auto insurance is supposed to protect you in case of an automobile accident you do not want to have a company that is not financially stable enough to pay out on claims on a timely manner. Go with a company like Farmers Insurance which has been a trusted insurance company since 1928!
2. Go with the highest liability coverage available: The last thing you want to happen is cause an accident and have to pay out of your own pocket for the injury and property damage you caused to others because you didn’t have enough insurance. With raising medical cost coverage, aggressive injury attorneys and with all the nice cars in our neighborhood it is very easy for the damage you caused to others to add up quickly! The smart and responsible thing to do is purchase as much liability coverage as possible because it does not cost too much to increase your liability coverage anyways (especially if you are a good driver). Our agency recommends purchasing coverage for $500,000 for injuries you cause to other (bodily injury liability) and $100,000 for property damage you cause to others (property damage liability).
3. Go with a higher deductible for collision: So liability coverage is the most important because having higher liability coverage can potentially save you hundreds of dollars in case you are liable for someone else’s injury and damage you caused. But what if you cause an accident and you want your car to be fixed? Well you have the option to have a $500 or $1,000 deductible but we think the $1,000 deductible is just fine for these reason:
- It will save you money on your auto insurance (It will offset the amount you are going to be paying more for going with higher liability coverage). Worst case scenario you will just be paying $500 more (The difference between the $500 and $1,000 deductible options) which is a heck lot better than having to pay hundreds of dollars more if you have low liability coverage!
- It will prevent you from making a small claim which will increase your rates for 3 years. If you need to get your car fixed due to an accident you caused and your damage is less than $1,000 you probably just want to just get that fixed yourself because if you caused an accident and get your car fixed by your insurance company your rates will increase on your next renewal! And for example if the damage is $750 and your deductible is $500 your insurance company is only going to pay out $250 which probably is less than the amount your rates will increase for the next 3 years. So unless the damage to your car is significant (more than $1,000) fix your car yourself and that way you can keep your auto insurance rates low (And just have collision coverage case something more serious happened to your car)
4. Go with a lower comprehensive deductible: So making a collision claim can increase your rates but making a comprehensive claim will not so we recommend having a low deductible for that portion of your physical damage coverage for your car. Damages that comprehensive coverage covers include: theft, vandalism, fire, falling objects, etc. Since this type of claim is considered “not-at-fault” you can make this claim as many times as necessary and your rates will never increase. Also this portion of your coverage does not increase your auto insurance rates significantly (especially compared to the collision coverage) so we recommend the $100 deductible option for your comprehensive coverage deductible!
5. Combine your auto insurance with your homeowners insurance with a company that offers the multi-policy discount (Like Farmers!): If you are going to have to have auto and homeowners insurance policies mind as well combine it with one company that offers the multi-policy discount! The multi policy discount applies to both policies so combining them with one company is a lot smarter than having one policy with one company and another with another company. With Farmers you will save 15% off your auto insurance and 25% off your homeowners policy.
6. Consider an Umbrella Insurance policy: So what if your $500,000 bodily injury liability or your $100k property damage liability is not sufficient to cover the other party’s loss? Again the most important thing to consider when purchasing insurance is to not be in a position where you have to pay out of your own pocket due to an automobile accident you caused and are responsible for. To protect yourself from a financial disaster it is very smart to purchase an umbrella policy which will give you an additional $1 to $5 million over your existing liability coverage. This is because you can purchase a lot more coverage ($1 million is a lot of coverage!) for only 2 to 4 hundred dollars a year. Learn more here!
Hope these 6 tips will help you purchase your next auto insurance policy smartly! We are all about providing you the best protection available at the best possible rates.
Please give us a call 800-875-8712 or fill out the form below and we will be very happy to help you purchase auto insurance smartly with quality and affordable insurance with Farmers!
We hope to hear from you soon!
