Most people fail to do a thorough car insurance comparison before they purchase a vehicle, whether it’s used or new – but there are many factors to consider, not the least of which is the make, model and year.
And that’s just the beginning.
You Gotta Have It
Most states have general car insurance laws requiring motorists to have insurance coverage; New Hampshire and Virginia are the two exceptions, though the latter slaps on a $500 penalty at registration time for motorists who do not carry coverage. As far back as the beginning of the automotive age (when most vehicles were hand-made and much more expensive in real dollars than they are today), it was realized that the costs in terms of property loss and injury could be catastrophic for an individual. Massachusetts was the first state to pass mandatory insurance laws in 1928; within twelve years, most other states had followed suit.
How Much Coverage?
State laws usually set minimums. These cover two areas: property damage and injuries. The best auto insurance rates may not necessarily be the best for you, however, particularly when it comes to personal injury and injury liability coverage. Because the health care system in the U.S. is profit-driven and these corporations demand higher and higher profits, they are offering less and less in the way of services and charging more and more for medical care. Although the federal government has repeatedly attempted to take this burden off of the shoulders of individuals and employers alike (since 1947!), health care industry lobbyists and their wholly-owned members of Congress have continually blocked these efforts – and the American people apparently aren’t open to this kind of change that those in other industrialized countries enjoy as a human right, fearing huge tax increases (they would be minimal and inconsequential compared to the obscene costs we pay for medical care today).
Therefore, the best defense is to buy as much injury protection as you can afford, because in a severe injury accident, the costs these days are likely to exceed those minimums.
Watch Out
New car insurance differs from the coverage you would buy for a used car – even if you are making payments on the latter. A lending institution will likely require that you have full coverage auto insurance on a new vehicle, if only to protect themselves (and not you). In addition, because a new car loses value faster than it gets paid off, you’ll probably want to look into “gap” insurance in order to cover the difference between what the vehicle is worth and what you owe on it should it be a total loss.
For a used car, it’s not so simple. In general however, you’ll probably want to raise the deductible and eliminate some coverage. If it’s a “beater” that you paid $500 for just to get around town, all you really need is basic liability, because you’re going to pay more in premiums for collision or theft coverage than the vehicle is worth.
Finally, remember that some types of cars are more expensive to insure than others. SUVs and two-seater roadsters are at the top of the insurance price range, while station wagons and four-door sedans are at the bottom.
Similar Posts:
- Wis. Senate Passes Auto Insurance Changes
- Is Auto Insurance Really Mandatory?
- Reforming reform: Is no-fault finished?
- Auto Insurance Coverage – Explaining Benefits
- Car Insurance Comparison – Why It is Important
