When most people hear the term insurance, they automatically think of personal auto insurance. That's because it's the most popular form of insurance, with all states, except Virginia and New Hampshire, requiring vehicle owners to have it.
That said, all personal auto policies aren't the same. The right type of policy for you will depend on various factors like the vehicle you own, how you plan to use the vehicle, and who will be using the vehicle. Here are three questions to guide you when buying personal auto insurance.
What Type of Car Do You Have?
Auto insurance companies have insured almost all types of cars. They know what types of cars are more likely to incur claims than others and how much it would take to cover damage to different types of cars. For example, in the event of a crash, the spare parts of a Ford Mustang will be more expensive than those of a mid-sized sedan, and this will reflect in the insurance costs.
Therefore, your type of car will determine the premiums you'll be paying. Unique vehicles, like classic or modified cars, may even require special insurance. However, depending on your insurer, you may be eligible for some discounts if you demonstrate a safe driving record over time or invest in modern car safety measures.
Who Will Be Driving Your Car?
It's likely that you're not the only one who will be driving your car. Perhaps you're married and share the car with your spouse. Or maybe your teenage child will use the car to run some of your errands. Whatever the case, it's important to know who will be covered by your personal auto insurance policy.
Most car insurance policies include family members as part of the 'insured.' But for anyone to qualify as a family member, they must be related to you by blood, marriage, or adoption and reside in your household. These terms may differ from one insurance company to another, so seek clarifications from your insurer to ensure everything is clear.
How Will You Be Using Your Car?
Will you be using your car every day? And how many miles do you think you'll be driving per month? How much you use your car determines the risks you're going to be exposed to. For example, if you drive your car every day over long distances, you need adequate insurance to cover all the risks involved.
Additionally, if you plan to use your car for work-related activities, like delivering pizzas or ride-share services, you need to state that to your insurer. In such cases, a commercial auto insurance policy may be required to protect you as you go about your work.
Reach out to a local car insurance service to learn more.