The moment you decide to buy a car you should start thinking about insuring it. It is one of the largest costs a vehicle owner will face. And it is probably the most important one. It may not make any difference where you buy your gas from but it does when it comes to who insures you. Again, how much gas you buy may not be a decision you think over. On the other hand, you should think about how much coverage you will need.
Are you buying an old car? Would a liabilities only policy be enough? Or are you buying a new automobile with a loan and need Gap insurance as well? These decisions will need to be based on the type of vehicle you are planning on buying and your financial position. Some people may not be bothered insuring a $10,000 vehicle since they would have no problem buying another one if it is totaled. So, you need to consider all those components of a policy like liability, collision, comprehensive, personal injury protection, uninsured motorist, underinsured motorist and rental reimbursement.
You should consider your family situation and where you live as well. If you live in the path of a tornado you would want to make sure that your policy provides tornado cover. If you cannot do without a car at all and you don’t have enough savings to rent one for at least couple of weeks you should consider adding rental reimbursement coverage as well.
If you are living in a high crime and traffic area like inner cities you want to make sure that you are protected against theft and accidents. Those are the areas where insurance rates would be more but those are the areas you need the coverage more too.
On the other hand, you need to start worrying about the costs. If you keep loading your policy it will become to expensive at a point and buying further coverage will not help either. When you purchase an auto you can drive it for years. When you buy car insurance it is only for six months in most cases. So, agreeing to pay couple hundred dollars more now would mean four hundred dollars in a year and so on. It keeps building just like compounding interest.
Don’t be hasty to drop collision and comprehensive coverage as they are there to protect your investment on a new automobile. Hopefully, you will never have an accident but you have to think the worst case scenarios. You have to think what would you do if something bad happens on the road. Do you have enough reserves to take care of the damages?
Another area to consider is how are you going to pay for injuries to your family and yourself. Do you have enough health insurance to pay for traffic related injuries? If not, you may want to buy personal injury protection. This cover not only pays for your hospital bills but also pay for loss of wages and other consequential damages you may suffer.