Insuring your car in your own name for the first time is an exciting moment. However, it also means that you’ll no longer be under your parent’s policy which has many implications. Here are 7 things you should know before you decide on an auto insurance policy.
Young Drivers are Considered Riskier
Unfortunately, even if you’re a very cautious driver you will still pay more than under your parent’s policy. While this may be seen as unfair if you have a clean driving record and follow all the rules, there are reasons for this.
Insurance companies establish premiums based on risk and factors such as age, gender, marital status, and more. Statistics show drivers under 25 years of age are much more likely to have an accident. Consequently, premiums for young drivers are higher.
It’s Not All Bad News
Luckily, if you’ve driven under your parent’s policy, you may have several years of clean driving under your belt already. This means that you’ve already surpassed the highest premium years. You’re also considered previously insured, which substantially lowers your premiums over someone who’s taking a policy out for the first time.
Many insurers offer a good driver discount if you’ve driven for at least 3 years without an accident or traffic violation and have never filed a claim. This discount can knock off between 10% and 30%.
You May Qualify for a Family Legacy Discount
Sticking with the same company your parents use is not only convenient – it may also lead to discount. Some companies offer a family legacy discount when multiple generations insure with their company.
Don’t Rely on State Minimums
You may be tempted to buy the cheapest possible policy, which is usually the minimum state-required liability insurance you need to drive legally. However, these minimums will not protect you financially if you’re in a serious accident.
Poor coverage won’t provide sufficient money for the replacement of a new car, medical bills, legal fees, or a settlement. You may have to pay anything your insurance doesn’t cover.
Most insurance experts recommend at least $100,000 per person bodily injury liability coverage and $300,000 per accident and $50,000 property damage liability coverage.
Talk to an Insurance Expert
Independent insurance agencies like ours work for you, have access to many products, and understand policy language.
Insurance policies are very complex documents and you need a professional on your side. We’ll explain everything to you in simple language so you fully understand what you need. Then we’ll compare the most suitable products and make recommendations.
You’ll also need a valid insurance policy before you drive your vehicle. They will confirm when the policy is in effect so you can take your vehicle home.
Finance & Leasing Companies Often Have Insurance Requirements
If you’re considering buying or leasing a car, talk to your insurance agent first. The make, model, and year of the vehicle can greatly impact your insurance premiums. Plus, finance and leasing companies often require specific coverage requirements.
Partner with a Pro for Savings
Shopping online for insurance isn’t the best route for any driver. An insurance agent actively looks for insurance discounts and re-evaluates your insurance needs as you pass milestones throughout your life.
Working with an insurance professional especially makes sense for a young driver. You’ll need help to minimize your premiums and maximize your coverage. In the market for a new policy? Give us a call today.