What Should I Consider When Shopping for Vehicle Insurance?

Buying vehicle insurance can be a dizzying experience, even for people who have been insuring their vehicles for years. There are a lot of options to consider, and a number of different types of coverage, and doing a little bit of thinking and research will often save a driver a substantial amount of money. One of the key things to remember is that once one determines the type and amount of insurance desired, it pays to shop around to multiple insurance agencies for quotes on vehicle insurance, as the difference can sometimes be substantial.

It's best to start with the bare minimum. In most regions, drivers need to carry some basic vehicle insurance by law, typically including basic liability and medical coverage. Someone with this basic coverage will be complying with the law, but he or she will be in trouble if anything costly happens to the car, which brings up the next step: deciding how much coverage one needs.

In addition to basic liability insurance, it's possible to purchase collision and comprehensive insurance, which protect drivers in accidents or in the event of something like a tree falling on a car. Underinsured and uninsured motorist coverage pays out if a driver is involved in an accident with someone who lacks insurance, and drivers can also purchase liability and medical insurance above the government-mandated minimum, something which is highly recommended, since the minimum is quite low.

If a driver thinks that he or she will not be able to replace a car if it is damaged beyond repair, he or she should get comprehensive and collision. Drivers who have cars with outstanding loans or who are leasing may be required to get such coverage by the company which holds the lien on the vehicle. These drivers may also want gap insurance, which covers the difference between the amount of lien and the value of the car. If, for example, a driver has a loan out for $45,000 US Dollars (USD) but the car has depreciated to $35,000 USD, the insurance company will only pay out $35,000 USD, leaving a gap which the driver must pay. Gap insurance covers the additional $10,000 USD in this instance, allowing the driver to cancel out the loan when the car is destroyed.

There are some other special circumstances to think about when selecting vehicle insurance. People who own major assets such as businesses or real estate may want to think about carrying very high liability coverage, so that lawyers are not tempted to go after these assets in an accident. Some drivers like roadside assistance, including towing, which can be a big help if a car breaks down in a remote area. Others may appreciate rental reimbursement, which means that the insurance company will pay for a rental car in the event that the insured vehicle is totaled or severely damaged.

Drivers should also pay attention to riders, like requirements that they use all aftermarket parts in repairs to cut costs, or clauses which cover drivers while they are in rental cars. Finally, it's important to remember that overinsurance can be an issue. If a driver has excellent health insurance, for example, it doesn't make sense to pay for huge personal injury policies with vehicle insurance, because the driver's insurance already covers him or her. Likewise, paying exorbitant fees for comprehensive and collision insurance on an older car makes less sense than putting that money in the bank so that it's ready in the event that the old car breaks down and needs to be replaced.