The Complete Car Insurance Guide for New Car Buyers
New Car Buyer Auto InsuranceIn 2019, the average cost of car insurance for a medium-sized sedan was $1,251. The range is vast, though. While a single 40-year-old with a clean driving record might pay $1,400 or less per year, a 2-parent family with teen drivers could pay upwards of $3,500 per year. New Hampshire and Virginia are the only states that don’t require drivers to purchase car insurance. However, residents are still responsible for damages incurred in an accident. If you can’t pay, your driver’s license and registration will be suspended. First time car insurance can be daunting, especially if you don’t know what to look for. From purchasing collision insurance to filing a claim, this guide will tell you all you need to know about first time car insurance.
What Do You Need to Purchase Car Insurance?In Massachusetts, purchasing car insurance is something you must do before you drive off the lot. Buying first time car insurance can be overwhelming, but once you know and understand all the elements involved in an insurance plan, you’ll have peace of mind taking control of what you’re paying for. For first time buyers, insurance rates tend to be higher, regardless of age. The reason for this is simple: new drivers lack the experience that veteran drivers have. It’s important to not only go with a great provider but to shop around for different rates, too. Be sure to begin your process before you go car shopping to get a better idea of what you’ll be paying based on the vehicles you’re interested in.
Gather Your Documents and InformationThere are some key documents you’ll need, even as you shop around and explore different rates. To save time while you’re checking rates online or talking to an insurance agent, make sure you have these things ready:
- Vehicle information (VIN, license, year, make, model, etc.)
- Personal information (social security number, driver’s license, etc.)
Which Insurance Options Are Essential?In the event of theft, an accident, or any other incidents, there are some coverage options you must have to ensure all your bases are covered.
Liability CoverageIn most states, auto liability coverage is mandatory. The law dictates the state minimum that is required of drivers to purchase. Beyond that, it’s your choice as to whether or not you’d like to purchase more. There are 2 components to liability:
- Bodily injury liability
- Property damage liability
Underinsured and Uninsured Motorist CoverageIf someone else hits you, but they don’t have enough insurance or any at all to cover the cost of injuries and damages, then uninsured motorist coverage will protect you. While it’s not mandatory in Massachusetts, it’s highly recommended by every insurance agent. Say you’re hit by a driver who doesn’t have any vehicle insurance, and you end up with a hefty pile of medical bills. Your uninsured motorist coverage can help.
Collision CoverageIf you get into an accident with another vehicle and hit other property like a fence or a pole, collision coverage should help pay to either repair or replace your car. When you get paid to replace your car, it’ll be based on the car’s actual cash value minus your deductible. Typically, collision coverage is optional. It may, however, be required by your car’s lender or leaseholder. The state of Massachusetts doesn’t require collision insurance. However, you can protect yourself from monetary loss with collision insurance if you own any valuable assets.
Comprehensive CoverageComprehensive coverage is another example of coverage that’s usually optional. Again, your lender or leaseholder may require it, though. If your vehicle sustains damage due to theft, hail, or vandalism, comprehension coverage could help to either replace or repair your vehicle. Like other coverage options, you’ll have to pay your deductible before you receive reimbursement for your claim.
Personal Injury ProtectionPersonal injury protection is only available for drivers in certain states. It can help you pay for medical expenses after an accident. Plus, it can also help to cover additional expenses in the event of an accident with sustained injuries. For example, if you need help with child care expenses or your accident results in lost income, personal injury protection can help. In some states, like Massachusetts, personal injury protection is required. In other states, it’s optional.
Medical Payments CoverageIf you, your family members, or your passengers who are driving your insured vehicle get injured in an accident, medical payments coverage is what will help to cover costs associated with their injuries. If the driver has injury costs like surgery, X-rays, and hospital visits, medical payments coverage will help cover those costs. Just like personal injury coverage, medical payments coverage is required in some states and optional in others. If you live in a state where all 6 of the aforementioned coverage options are available, don’t hesitate to add them to your plan.
What Other Types of Auto Insurance Coverage Are There?When you discuss insurance rates with an insurance agent, they’ll know exactly what’s required in your state. Likewise, they’ll be able to give you recommended minimums and help you figure out what additional options are smart choices for your plan. There are additional coverage options that many drivers choose to add to their policy, all dependent on their situations. For example, towing and labor cost coverage is one option. However, you might not need it if you live with your parents, and they already have a coverage plan for towing costs. Here are some additional coverage options many drivers opt to add to their policies:
- Rental reimbursement coverage
- Gap coverage
- Towing and labor cost coverage
- Sound system coverage
- Ride-sharing coverage
- New car replacement coverage
- Classic car insurance
What Affects Vehicle Insurance Rates?To calculate insurance premiums, insurance companies go through an “underwriting” process. Insurance agents use your personal information (like location, age, make and model of your car, driving history, etc.) to determine what you’re premium will be. The more likely they deem that you’ll file a claim, the higher your rates will be. For example, someone who has just learned to drive and owns an expensive car will have a much higher premium than someone with a longstanding safe driving record. Let’s take a look at all the factors that may affect insurance rates.
- Coverage levels
- Driver history
- Age and gender
- Credit score
- Your vehicle
- Safety features