Understanding Car Insurance … for those “Oh Sh!#!!!” moments

Car Insurance Basics:  what coverage you need, what it means, and how to keep your costs down

Sherpa Sense:

Correct auto insurance coverage is critical….. Because you will need it!

Let’s Yak:

Know your insurance terminology.

There are several types of coverage (liability, collision, comprehensive, etc.) that your car insurance policy could include – some required, others are optional. See below.

Coverage amount: How much the insurance company will pay.

Deductible: Amount YOU pay before the insurance company pays anything.

There are other car insurance add-ons like roadside assistance, car rental and travel expenses, etc. Decide if you need or want them. While not expensive, it does add to your monthly payment.

Take a Hike!

In addition to checking with Flo, get car insurance quotes from several companies. Get quotes for the same type of coverage, coverage amounts, and deductibles so that you can accurately compare them. #bestdeal

Typical Auto Insurance Policy Summary (using the above sherpa recommendations)

  • Liability (bodily injury, property damage): $100k/person/$300k/accident, $50k
  • Collision: $500 deductible
  • Comprehensive: $250 deductible
  • Personal Injury Protection: $35k
  • Uninsured Motorist/Underinsured Motorist (bodily injury, property damage): $100k/person/$300k/accident, $50k

Yakety Yak

Want to reduce the cost of your insurance? Try these ideas:

  • Good student discount. Even if you have graduated, you may get a discount by sending them your grades.
  • Safe driving programs. Take a short training course get a reduced rate.
  • Let the insurance company track your driving by installing an “auto tracker” in your car.
  • Lower your coverage amounts.
  • Increase your deductibles (but be sure you have the $ to cover a higher deductible).
  • Bundle your insurance. Receive discounts due to multiple policies with one company.
  • Avoid traffic tickets, be accident free, and have a good credit score. #easiersaidthandone

Once your car is older and your loan is paid off, you might consider dropping collision and comprehensive coverage. Use the 10% rule of thumb – if the annual cost of collision and comprehensive insurance is more than 10% of the replacement value, you may want to drop these. #accidentfreedriving

“When a deer hit my car last month, I was so thankful to have had comprehensive coverage with a $0 deductible. The repair cost was huge – half the cost of the car!!! Luckily my insurance covered the cost in full. Repair done and my car is now looking new again. WHEW!”

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