Are you looking at buying your very first car? And you need to also look at buying insurance for the very first time. You know, you’re a little bit overwhelmed by all the options that you’ve got to take a look at and all the different prices, and you’re wondering, what’s the real difference between the different prices of the insurance and all the different coverages? And what do I really need anyway? If that’s you, then I’m gonna try to see if I can help you out here in this video where I’m gonna cover Six Essential Tips for First Time car buyers when it comes to insurance, I know it can be a daunting task, right, to try to understand all the different things in there, so I’m gonna try to help you understand and break it down for you so that you can make a clear and informed decision when it comes to buying your insurance, it’s also you just don’t overpay for what you’re buying.
Understand the types of insurance that are available
There’s a lot of different coverages, and you need to understand that car insurance isn’t just one size fits all. You need to familiarize yourself with the different coverages that are in there, so you don’t overpay for the insurance and buy stuff that you just really don’t need. You know, the number one thing that you need to buy is going to be liability insurance. Liability is a is a limit of insurance, basically a bucket of insurance that takes care of coverage and damages that you cause to other people for their property damage, and then also for their bodily injury. This is, like I said, a bucket of of money, basically, like a It’s kind of like a checkbook, and it has a limit on there. So, if you take a look at the policy and you see that you’re buying $100,000 of liability insurance, that means you basically got, like this checkbook, access to this checkbook of $100,000 that you can pay claims off of that you are found to be responsible for. This is property damage. This is vehicle damage. This is medical bills. This is rehabilitation. This is surgery for someone else that you caused an accident with. This is a very important piece of the coverage that you need to have, and it’s typically required in most states.
Why Collision Coverage is important
Collision covers repairs to your own auto. If it’s in an accident, there’s not other insurance. You have a collision or you turn the car over, this is what will fix your car. It’s gonna be a deductible in that it may be $500, $1000 maybe $2,500 but that’s how much you pay first, then the policy pays after that based off of what the market value, or the actual cash value basis is of your car, understand underneath comprehensive and collision.
Comprehensive Coverage
Comprehensive is it covers non collision damages, like theft, weather, vandalism, glass breakage, all those different things underneath that, again, there is a deductible. You pay that first, then it takes care of it after.
Uninsured or Underinsured Motorists
Now, if you get an accident and you’re not at fault and someone else caused it, and they either don’t have enough insurance or they have insufficient insurance, then this will take care of fixing either your vehicle or taking care of your medical bills. Scenario is you’re driving, you get an accident, the other people are at fault. They don’t have insurance or enough to take care of your medical bills or to fix your vehicle. This can take care of that. So know each of the different types of coverage and determine what combinations best suit your needs and your budget.
Those are the four primary ones that I usually suggest that everyone buy. The other things, you can decide if your budget allows for it or not, but you need at least address those four things and buy those four things.
Uninsured and Underinsured Motorist Coverage
These are both coverages that you can buy on your auto insurance policy that would apply if you’re involved in an accident, where you’re not at fault, and the other people either don’t have enough insurance or have no insurance. Another scenario is if you get hit by hit and run, that will also trigger this coverage for you.
Use an independent insurance agent
An independent insurance agent is someone who represents a lot of insurance companies. They don’t represent just one. There’s companies out there that are captive or exclusive agents that work for a single company. Those work for the company, not for you. An independent insurance agent works for you, not the insurance company. They have your best, your best needs in mind. And most of the independent agents live by this creed, basically like these four principles, our agency lives by these four principles, and it is number one, make sure that your insurance does its number one job.
Its number one job is to protect you and your assets. Look, you got stuff, you got a vehicle, you got a home. If you don’t have a home now, you eventually will. You’re gonna have savings, you got ability to earn a living. All these different things are what makes up your assets, and your policy needs to protect that. So if you get an accident and there’s a lawsuit against you, the insurance takes care of paying the bills, not your assets, because if you don’t have enough insurance, then you’re gonna have to write a check for whatever those differences are in expenses.
The next thing is going to be, we want to make sure that you understand what you’re buying. Look, you’re going to spend a lot of money on this. You deserve to understand. If the agent won’t spend the time to help you to understand, or you just don’t feel comfortable, move on. There’s a lot of other agents out there. Number three is, we’re going to make sure that it fits your budget. Hey, if it can have all the bells and whistles, but if you can’t afford it, then what good is it? We will help to tailor it to make sure that it fits your needs. Then lastly, you’re gonna go through a lot of life stages, and your coverage needs are not gonna be the same through one of those stages. A good agent will help you to understand and make sure that policy fits those different stages.
Look, think about it, you know, right now you’re just starting off. It’s the first time you’re buying a policy. You don’t own a lot of stuff, you know. So your needs are not as big now as they will be later. You still have needs, though, that need to be addressed, and that agent needs to understand it. Then you get to the stage where your kids are now driving well, your your exposure just went up significantly because they’re young, they’re inexperienced, they’re distracted. There’s a lot more potential for accidents. You need to protect your assets because of that. Also, they’re out on social media and other things. And things just happen out there, and lawsuits can follow. Then once your kids go off to school, and then finally, once you become an empty nester at each one of those stages, you have very different needs. Your agent needs to understand that and change your policy and your coverages to suit the stage of life that you’re in.
Google you Agent
It shows you a few things. One you can see, how do people think about them? do they have a big presence, you know? Are they embracing things that are, you know, like being online to see, are they still behind the times? Are they with the current times now? Do they have some sort of social media presence? Check those things, you know. And when you look at the Google reads, don’t just look to see, did they save people money? See, did are there other things, like claims experience? Did they help you to understand the policy, you know? Are they patient with you? Look for all these different things. Not just did they save people money. Saving money is great, but you really need to know they’re going to be a good risk manager for you.
Don’t skimp on Liability and UM limits
Don’t buy these down trying to save money. This is not the best place to save money. The difference between a $100,000 to $300,000 liability limits is not very much. And then also, in the long run, you get an accident, you bought $100,000 and you needed three you’re gonna pay the difference between those if you have an accident that’s over that policy limit, and that could cost you a lot of money for a lot of years.
Mistakes You Need To Avoid When Buying Auto Insurance
Auto insurance is expensive and it is getting more expensive. Right now, we’re seeing with inflation being so much more and so many more natural disasters happening, we’re also seeing auto insurance rates just go higher and higher.
Consider higher deductibles for lower premium
If you want to try to save money, this is where you do it. Instead of buying a $500 deductible, maybe you buy 1000 or 2500 look, you don’t need this. You don’t need to file Small Claims anyway, because you’re gonna have in that policy built in discounts for not having claims. Soon as you turn in a claim, you’re gonna lose that discount. Make it worth it. If you’re gonna lose the discount, make it worth it, don’t file a claim. If it’s $1,000 or even $2,000 let it be a larger claim. So if you’re gonna have a if you’re gonna file only big claims, then also just go ahead and save the money on the premium up front and take the bigger deductible to begin with.
Bundle to save
There’s a lot of reasons why you want a bundle to save. You know, you can save with discounts. You can save with shared deductibles, and you can also save with better coverage options like dimension deductibles and cash back, you know, and potentially you may wind up needing home or renters coverage anyway. But the most important reason is, when you’re hiring an insurance agent, when you’re buying a policy, you’re hiring a risk manager. That’s really what you’re doing.
You’re hiring somebody that’s going to manage the risks that you have in life of owning a vehicle, owning a home, you know, traveling or working or just going about in life. You know, you have exposure to things happening, everywhere you go, everywhere you drive, something can happen. You can make a mistake, and something can happen, and a lawsuit could entail from that, or you may just have property you need to replace. That is what the job of a risk manager is, to make sure that you’ve got most of your exposure is covered, while trying to keep your costs at the minimal.
If you have a single agent, an independent agent, then they can understand where you’re at in life, where the life cycle you’re in, also all the different policies you have and what you own, so they can make the best determination of what package is that you need, and they can save you the most money by doing so, not just on premium up front, but also when claim time happens, making sure that the amount that you pay out of pocket is minimized. So once you chosen a policy, don’t just set it and forget it as your life changes, new job, moving, etc, going through the life cycles your insurance needs may change too regular review coverage to insure remains the best option for you in your circumstances. That’s why you need this single agent that’s a risk manager for you, so that they can adjust according to the best value. Hey, I hope these tips help you out as you’re buying your very first car and also becoming the very first time you’re buying auto insurance.
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Beaux Pilgrim
Reed Insurance