You know that it’s mandatory to have insurance coverage on your car, but you may not be sure of exactly what type of coverage you need. This whole situation can be complex, and you have to take into account things like the type of vehicle you have, your budget, how much you use that vehicle, how much it’s worth and much more. It’s not as if there is just one type of policy that will work for everyone.
With this in mind, it’s important to break it down so that you can determine exactly what type of insurance you need. The best car insurance Rockwall has to offer will be a plan that is catered specifically to your situation.
Misconceptions about comprehensive coverage
One of the first things you want to consider is getting collision coverage and/or comprehensive coverage. This is an area that many people are confused about. Some studies have claimed that 68% of individuals didn’t really know what they were purchasing. They had comprehensive coverage and assumed that, should they get in a collision, it would cover them. But it would not.
Comprehensive coverage is essentially just coverage from everything that isn’t an auto accident. It will cover you if your car gets stolen or vandalized, for instance, and it will protect you if there is a severe weather event and your car is damaged by flooding or a falling tree. You do want this coverage on your car if you’re worried about this type of damage, or about theft, but it’s not going to do anything if you’re involved in an accident.
That’s where collision insurance comes into the picture. If someone else is at fault, you may have options to seek compensation from them directly or through their insurance company. If you are at fault, the collision insurance covers the damage that you caused to your vehicle. Therefore, someone who just had comprehensive insurance may assume that they’re covered in the crash, as the vast majority of people do, but they actually need to have collision insurance.
What is liability insurance?
You’re not obligated to have comprehensive insurance or collision insurance, although it’s a major risk to drive without them. What you need to have is liability insurance. This is required by law because this insurance policy is going to pay for damages that you caused. This could be property damage, damage to another vehicle or the injuries that someone suffers in a crash. So, while your collision insurance policy would be focused on yourself, your liability insurance is focused on everyone else.
You may not be covered if you use your car for work
Another thing to consider, especially in the modern gig economy, is that some insurance companies state that you are not covered if you’re using your personal vehicle as a work vehicle. That doesn’t necessarily mean driving to the office. Perhaps you are a rideshare driver as your main source of income. Maybe you have a side job as a pizza delivery driver. You need to be careful to ensure that the policy you have will cover you if you are involved in an accident while you are performing these tasks. Not all do.
Would someone else be covered?
Say that you buy the best car insurance Rockwall companies can provide. Then you loan your car to a friend or a family member. If that person gets in an accident, and they don’t have their own insurance, then what happens?
You’ll be glad to know that insurance generally stays with the vehicle. In other words, your vehicle is insured specifically because you bought that policy, but it doesn’t just apply to you. Generally speaking, if someone else crashes your car, your car is still covered by your own insurance policy. Other factors to consider are household members, frequent drivers, driver restrictions and excluded drivers. It’s best to discuss with your agent to clarify this “permissive use” and how it applies to your specific situation and policy.
How do they determine the price of your policy?
The price of your policy starts with the different types of coverage that you want. Liability insurance is the cheapest, and adding comprehensive or collision policies will increase the price.
But there are a lot of other factors that have to be considered, as well. The price of the vehicle may play a part, although there is not always a perfect correlation between expensive vehicles and expensive policies. Some expensive vehicles are seen as less of a risk by the insurance company, so they actually give you better rates because those vehicles crash less frequently, get stolen less often, etc.
Your personal details are also going to play a role. Your age is important, as young drivers tend to have to pay more than older drivers. Additionally, your record as a driver is going to factor in. If you have been involved in a lot of accidents or you have a lot of traffic tickets, this is going to increase your rates, whereas driving safely and avoiding tickets and accidents can push your rates down over time.
Getting the right policy
Now that you know how to carefully consider the different components of an insurance policy, you need to know how to get the right policy for you and your vehicle. This is something we specialize in at Rockwall Insurance, so do not hesitate to get in touch with us today.