How Much Car Insurance You Really Need
How much car insurance you really need
you need to understand the three types of car insurance coverage available. That includes liability, comprehensive and collision. Ok so liability coverage liability insurance covers any bodily injury or property damage. When you have an accident that is your fault in other words if you were to hit somebody your insurance would cover the cost of the repairs to that car or if you caused any harm to the parson like physical injury liability insurance. This is the basic type of insurance that everybody needs. It’s illegal to not have this type of insurance so make sure you it. So, bodily injury liability think of this as medical cost properly damage liability think of this as the cost of the repairs to the car comprehensive insurance covers any kind of repairs to your car that did not result from a collision. Let’s say your car got broken into a tree branch fell on top of it your car caught on fire unexpectedly from a natural disaster hailstorm came around any of those things would be covered by comprehensive insurance and the last type of insurance number three is the collision insurance. Insurance covers the cost of repair your vehicle if you are involved in an accident and it dose not matter whose fault. It is whether it is the person who hit you or you hit somebody else collision coverage will cover the cost of repairs to your car. Your own liability insurance dose not cover the cost of repairs towards your car unless the other person is at fault and then their liability insurance would cover the cost of your repairs and let’s say that other person didn’t have enough liability insurance to cover the cost of your repairs. This is where collision coverage would help you out one important thing to note here is if you have a car loan you may be required to have full coverage . Which all three types of insurance on your car. So, while you may not have the opportunity to pick and choose the different types that you want you do have the option to shop around different insurance companies to get the best rate.
you need determine how much car insurance you need I will say this it is a really good idea to maximize your liability coverage. Now generally most insurance companies will max out in three different areas. This would include person injury total injuries per accident and property damage. So, when you go into your insurance coverage you can log on to your account you should see three different numbers the max generally for personal injury is $250,000 the total injuries per accident $500,000 and property damage max is $100,000.
Now, I Wanted to show you guys exactly what type of insurance. I’m carrying with my 2015 Subaru forester. So, you can an idea but I have maxed out bodily injury and property damage liability- those exact numbers -5500 and 100. So, it’s a good idea for you max this out if your numbers don’t match mine and to give you an idea of how this would impact your premium. I went ahead and went inside of my insurance coverage and I did some change hypothetically to see how it would impact my rate.
So, from the menu and I’m on progressive right now i could select from the 250 500 100 and let’s say that i just dropped it down to half that 100 per person 300 per accident and 50 per accident and see what does for my car insurance premium.
So, you can see it actually reduces my premium from 215 dollars and this is paid out every six month to a hundred and ninety seven dollars for a six month premium. So, my premium overall would drop $14 and 78 cents if I switched within my policy period but if you look at the effect of the entre six month period because i pay car insurance every six months which we’ll talk about how that saves you money as we that’s the difference between 2:15 and 197 and it only changes y six month premium by $20.00 . So, let’s get this straight my liability in half only saves me $20 for six months. So, it only saves me three dollars and 33 cents per month . I don’t know about you but paying just three dollars extra to literally double my liability. I think that’s pretty good deal. So, maximizing your liability insurance is key…
Next you’re going to take look at your comprehensive coverage it’s pretty inexpensive to add. so, I would suggest including this as well here’s a very important note about comprehensive and collision coverage raise your deductible if you have thousand dollars in euro ship fund that’s set aside for emergencies if you have at least one thousand dollars in savings raise your deductible on your comprehensive and collision coverage and just for kicks. I’m going you what happens when i reduced my deductible from$1,000 to one hundred dollars. Okay remember comprehensive insurance covers any repairs to your car that did not result in a collision. So, these are things like natural disasters theft that sort of thing. So, when I went into progressive and I changed comprehensive deductible from $1,000 to $100. That was a difference between paying twenty three dollars two pain seventy six dollars. It actually is a big difference because it costs me fifty three dollars more the change raises my premium from three hundred and eighty dollars every six month to four hundred and thirty three dollars.SO, that’s a difference of about eight dollars and eighty three cents additional per month or one hundred and six dollars per year a great way to save even just hundred dollars per year in my case is just raising my deductible. Now let’s see how changing the collision deductible from $1,000 to $100 changes things.
So, this is insane but when i changed it from a $1,000 deductible for collision coverage which was one hundred and five dollars for a six month premium rate dropping it to one hundred dollars increased my premium to two hundred and ninety dollars. That’s insane this by far is the biggest swing impacting my premium by lowering my car deductible from $1,000 to one hundred dollars. I effectively increased my premium basically the money that you pay towards the car insurance company just to keep your car protected. I went from a three hundred and eighty dollars for a six month period to five hundred and sixty-five dollars that’s a difference of three hundred seventy dollars per year if you do anything if you take away anything from this i highly suggest that you increase your deductible on your collision insurance to one thousand dollars. So, you’re probably wondering why is that such a big difference in lowering in lower collision deductible then higher one well what you are basically telling the insurance company is that you are willing to take on less risk if somebody hits you to pay for that out of pocket repair costs then the insurance company and the insurance man be like oh you don’t want to pay more for tha collision coverage then we’re gonna charge you more because you are a more risky customer to us and we’re afraid that somebody’s gonna hit you and you’re not willing to pay more upfront out-of-pocket costs that’s why it’s so important to have at least $1,000 in your emergency fund this is the ohshit fund that I keep talking about because if you have at least that much money you have the opportunity to save yourself some mega bucks on your insurance premium .
So step three is to get multiple quotes from multiple car insurance companies. So, you’re going to have to do a bit legwork to shop around but now you know what to look for right liability you are going to max out in my case it was 250 500 100 you’re also going to opt for comprehensive and collision coverage with a $1,000 deductible in each got it then you’re going to request and put that out there to different insurance companies.
Now, I recently used a tool called gabby that’s G ABI comm and what I did was Downloaded my coverage policy from progressive I uploaded it into Gabl’s system and I said keep my coverage the same for you. You might opt to change your coverage to what I listed out and then they’re going to email you and say hey these are all the car insurance company quotes that we selected for you that could be a good fit and then you can opt to choose to switch through Gabby it’s really simple I’m going to drop my link below. So, that you can sign up and see how it goes because i had already maxed out my liability and my deductible is for comprehensive and collision i actually was told by Gabby that I was getting a good deal. So, I didn’t make any changes and then they’re just going to keep that on record so that if there was a new from another insurance company they would be able to notify me and then i can make a switch tou do not have to be brand loyal to these auto insurance companies they don’t care they want money and what I really like about this is I’m okay switching. So, that I can get the best deal and the best coverage
Once you get the multiple car insurance quotes and you’re able to make some adjustments step four is optimize your car insurance to get the best rate. Now one thing that I really liked about progressive and I know a lot of other car insurance companies do this is you can bundle other insurance policies with car insurance. So with progressive I bundled my renter’s insurance and auto insurance into one and we get a slight bundle discount. My other trick to saving money on car insurance is opt to pay the six-month premium rate instead of the monthly rate when you pay the month rate you’re actually paying slightly more then if you were to pay the six-month rate in my case monthly rate was 72 dollars and my six month rate was three hundred and eighty dollars well when you divide the three hundred and eighty dollars out by six months it only ends up being sixty three dollars. So, that’s difference of nine dollars that I’m saving or a hundred and eight dollars per year and I don’t know about you but I’d rather save that one hundred and eight dollar for something really nice a really quick trick to do. This is simple add in that six month premium to your budget and budget out for it monthly. So, it still feels like I am paying my car insurance monthly but instead of giving it to the insurance company I’m just setting it aside in my account and then when that six month is due I will go back in pull that money out of my account and pay for it because I’ve already saved up for it monthly.
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