Buying car insurance for the first time can be a limited scary. The terminology that the salesman uses and all the choices are honest overwhelming. The following will help you in making decisions when purchasing your first insurance policy.

1. Look into your state requirements. Nearly every area requires that you at least carry liability insurance. When a plot speaks about liability insurance they are speaking about the bodily injury and property wound coverages. This coverage is required because in the event of an accident it guarantees the injured party is going to be cared for and the property damages cared for as well.

2. Understand the types of auto insurance and if they are something you want to pay. For example many don’t pay for comprehensive coverage because they feel it’s cheaper to pay for the damages out of pocket. However, if the vehicle is stolen there would be no reimbursement if comprehensive coverage wasn’t selected. Another example is the rental option. Many feel that they can make other arrangements while their car is in the shop and would rather not pay for a rental allowance. Make sure you understand Liability, Collision, Comprehensive, Medical Coverage, PIP and Rental among others.

3. Understand your vehicle. If your vehicle were to be totaled tomorrow what would you do? Is your vehicle paid off? If it’s totaled how are you going to pay it off? Would you be able to purchase another one? Your answers to these questions will determine if you need Collision coverage.

4. Be sure that you understand any other insurance plans that you may have. Health Insurance plans may cover bodily injury claims. You will want to be certain and ask your insurer about how their subrogation plan works. Your home owner’s insurance plan may cover damage to your property, other than your car.

5. Know that the coverage you purchase is based on the value of the vehicle. The older the vehicle is the cheaper the rate will be. If you drive a sports car your rate will be higher.

6. Where you live and how often you drive are also key factors in determining the cost of your coverage. If you are in a rural area the cost is going to be lower than if you live in a city. This is because crime rates and vandalism rates are typically higher in a city than in the country. The more you drive your vehicle the higher your rate will be as well. The idea behind this is that the more you drive your vehicle the higher your chances are of being in a wreck.

7. Age, sex, marital status and driving record are another factor in determining the cost of your car insurance. If your driving record is spotless then the insurance company feels petite risk in insuring you as you will likely not procure in an accident. Your age is a factor because the younger you are the more likely you are to drive rapid and recklessly and that leads to accidents. Sex also makes a difference. Males typically pay more in insurance premiums than women. Marital status is a factor because with marriage comes responsibility and if one is married the likelihood of fast and reckless driving is minimal which lessens the chance of an accident and insurance payout.

8. Choosing a deductible is a difficult choice for some. To make it easy there are two factors involved

a. How distinguished can you afford to pay out of pocket at one time in the event of an accident?

b. How much can you afford to pay out in your weekly, monthly, quarterly or semi annually premiums?

Once you have answered these questions you can better navigate the deductible decision.

9. Watch multiple quotes. Don’t assume that the first quote you receive is the best or the only quote that you will receive. Ask the sales person to do a comparison for you. If the salesperson can’t do a comparison for you ask how long the quote is good for. Most insurance companies will do a quote on the phone. There are several companies that give quotes online and allow purchases to take place online. Get at least 3-5 quotes prior to purchasing a policy to ensure you are getting the best plan for your money.

10. Review the policy prior to signing. Obtain sure that you look for the following two clauses in your policy:

a. Retain your right to sue- fabricate sure that you have the right to to sue if you have a dissimilarity with your insurance company. If this clause is removed often you are forced into arbitration between you and the insurance company and generally the insurance company comes out ahead.

b. Avoid aftermarket parts requirements. This policy will be written that the body shop may use “new factory,” “like kind and quality” or “aftermarket parts” may be used for body shop repairs. This is especially important if you have a current car.

Resources:

http://auto.howstuffworks.com/car-insurance4.htm

http://www.edmunds.com/advice/insurance/articles/89618/article.html