Buying your very first car is one of the most exciting milestones in a person’s life. Unfortunately, this milestone must be followed by another, much less interesting one: purchasing car insurance for the first time. There are several different types of car insurance to choose from. Additionally, there is an abundance of insurance providers on the market today. Making your way through the jungle of policies, deductibles, and coverage can be overwhelming for a first-timer. Thankfully, the tips below can help you make an informed decision.
Which type of car insurance is the best?
Without a doubt, there is one type of car insurance that supersedes all the others. Comprehensive car insurance, as the name suggests, provides insureds with the most comprehensive coverage available. Although it tends to come with higher premiums, it is the most likely to save you money in the long run.
No matter how good of a driver you are, accidents happen. Although you may have an impeccable driving record, you can’t control the actors of other drivers on the road. Additionally, there are other types of incidents that can damage your vehicle.
What does comprehensive car insurance cover?
Plans vary from provider to provider, but comprehensive coverage always grants a high level of protection. These types of insurance plans can cover damages to vehicles, property, and people across a vast variety of incidents. For example, comprehensive coverage plans may include coverage for damages sustained during natural events. If you live in an area that is especially prone to flooding, fires, vandalism, or theft, comprehensive coverage is a must.
What other types of insurance are there?
If you are in the market for less coverage at a lower price, there are a few options available. However, it is important to keep in mind that certain areas may have different insurance requirements. In Australia, the minimum amount of coverage a driver is permitted to have is CTP or, compulsory third-party insurance.
This auto policy only provides coverage for damages that the other driver and passengers involved in a collision sustained. In other words, you and your passengers will still be left underinsured. If a property was also damaged in the subject collision, you will be held responsible for it.
Why do other insurance plans cost less?
The upside to minimal insurance plans like CTP is that the monthly premiums are usually very low-cost. This affordability is because the insurance company is taking on very little risk by only offering minimal reimbursements for damages. Insurance companies use risk assessments to determine plan pricing and coverage options. Risk assessments help insurers get an idea of how much risk they will be taking on by insuring you and your vehicle. The less risk the insurance company is exposed to, the cheaper your coverage will be.
Nearly every insurance plan can be accompanied by add-ons. Examples of add-on coverage include fire damage, theft, and protection in the event of a natural disaster. If you have made the decision to obtain comprehensive coverage, the next step is to compare plans. Since there are so many insurance providers to choose from, it is in your best interest to compare and contrast coverage and rates. Browsing the insurance market can be a tedious and time-consuming task.
Thankfully, websites like iSelect have you covered by providing a car insurance comparison tool. First, you should shop around for a few possible options based on your driving history, age, and location. Then, run your information through a car insurance comparison tool to determine which types of policies may be available to you. After you have made sure to obtain the legally required amount of coverage, your decision will be left entirely up to you.