Getting your car insurance for the first time might be a very stressful, time-consuming and costly process, but when you consider the benefits attached to it, you may end up not regretting it at all. Apart from being mandated by the law, it is very important for you to get car insurance.

Why is car Insurance so important?

It is possible to buy car insurance and not need it. But what happens when you need it and do not have it? The need for car insurance cannot be over-emphasized because anything can happen anywhere and at any time.

Here are a few reasons why you need car insurance;

  • Car insurance provides coverage for you if you cause an accident.
  • You do not have to worry about paying for damages, provided you have car insurance that covers you.
  • Solid car insurance can cover a percentage of your health insurance by paying a part of your medical bills after an accident.
  • Car insurance protects you and your car without paying out of your pocket. You do not have to worry about losing your auto to contingencies or the court.
  • Overall, car insurance will keep you at peace, knowing your insurance company has got you covered.

How much does it cost to get started with your car insurance?

The cost of buying car insurance majorly depends on your insurance company and whether or not you are a first-time buyer. Other factors that determine auto insurance cost are coverage policies, your car, location, age, marital status, and so on. Apart from that, it is beneficial to know that getting started with car insurance for the first time means serious spending- at least for the first year. Most Insurance companies leverage the inexperience of first-time buyers that they charge higher than an experienced buyer. The increase in rates ranges from 40% to 50% increase.

Getting car insurance as a first-time driver

Getting car insurance as a first-time driver might not be the first thing you think of after getting your driver’s license or your car. However, the sooner you realize you need it, the better. For most Insurance companies, first-time drivers pose a high risk to them. To limit their liabilities, they often charge higher rates. The only way to reduce the inevitably high cost is to join an existing policy- either your parents, siblings, or partner’s policy.

11 things you should know as a first-time insurance buyer

  1. Third-party liability policy: For every auto insurance plan there is a third-party liability policy which is a form of liability insurance. It covers the costs of damages and injuries caused principally by an insured driver when found liable. In other words, third-party liability policy is not meant for you, because payment is usually towards the third party. It has two types of liability coverages;
  • Bodily Injury Liability
  • Property Damage Liability

It is mandatory in most states that a driver possesses third-party liability coverage, no matter how minimal.

  1. Get the right information to know what works for you
  • Compare insurance companies: One of the activities to help accurately compare insurance companies is shopping around. The activity will assist you in knowing insurance companies that offer policies that are right for you. The more you find, the more you can compare and contrast- to be aware of what works for you.
  • Compare coverages: Comparing coverages will assist you in making the right decision suitable for you and your car. A comprehensive cover means a better insurance coverage for you.
  • Compare insurance quotes: Comparing coverages is one thing. Weighing up quotes, however, is another. When you compare quotes, you get an estimate of the premium you will pay. This premium is based on the coverage you have chosen and the information you have given. Which will assist you in picking a plan with the perfect premium that wouldn’t drive a hole through your pocket.
  1. Your insurance policy should be flexible: Your requirements for insurance coverage may begin to evolve. With that, your auto insurance company should be able to provide a flexible enough policy for you.
  1. Pay within the first 6 months or less: As a first-time buyer, it is vital to note that the closer your payment plan is spread, the cheaper your rates are. For example, an insurance company may decide to give you a 10% discount for paying in full within six months or less. An outright payment in full might not be possible, but it definitely will save you some money.
  2. It is expensive: Buying car insurance for the first time is expensive at least for the first time.
  3. You’ll pay even more as first-time driver: except you are joining an existing policy or registering under bundled car insurance.
  4. The information needed: For first-time buyers, you will need to know the type of information required by insurance companies;
  • Driver’s license
  • Date of birth
  • Address
  • Occupation
  • Marital status
  • Education level
  • Driving history
  • Vehicle Identification number
  • Model, make and age of your car
  • Credit score- The lower the credit-based insurance scores, the better the insurance rates.
  1. Evaluation from time to time: Periodic evaluation will aid you in reviewing insurance coverages that you need more than others.
  2. There are many other factors that affect cost these include;
  • Deductibles (compulsory and voluntary)
  • Car model, type and Age
  • IDV( Insured Declared Value) of your car
  • Number of coverages on your policy
  • Location
  • Credit-based insurance score
  • Insurance history
  1. The waiting period before your policy is issued: Most policies are not issued immediately after premium payment. Some insurance companies take weeks, while some others take months.
  2. There are exclusions to your auto insurance policy. These exclusions depend on each state but the most common are;
  • Contingencies caused as a result of driving your car for commercial purposes when you have not purchased commercial insurance policy
  • Using your vehicle for illegal activities
  • Invalid driver’s license
  • If a driver is under influence( alcoholic or drug) while driving.
  • Events that occur outside specified geographical boundaries.
  • Liabilities that are as a result of war or war-like events.

References

  • Alexandria Bova, Brandy Law (2021,October 26) How to buy car Insurance for the first time. Retrieved from https://www.valuepenguin.com
  • The important site (2022, February 6) 10 reason why car insurance is Important. Retrieved from https://theimportantsite.com
  • Emily Delbridge, Thomas.J. Catalano, (2021, July 8) Getting Car insurance for a first time driver. Retrieved from https://www.thebalance.com
  • Policy Bazzar,(2008-2022) 20 Tips for first time Auto Insurance buyers. Retrieved from https://www.policybazaar.com
  • Amy Danise, Les Masterson, ( 2022, February 1) Auto Insurance scores explained- Forbes advisor. Retrieved form https://www.forbes.com