Whether you are buying a brand new car, or an old one from someone else, auto insurance is something that you’ll have to buy no matter what. It is mandatory in almost every state (except Virginia and New Hampshire) to have proper liability coverage with the minimum coverage limit prescribed by the State. Some states even require you to have a personal injury protection plan as well.
Buying auto insurance can be confusing, especially for first-time buyers. There’s a mountain of paperwork, documents needed, photographs, and a lot of patience to go along with the long process. You do not want to miss something while you are buying an insurance policy and then repeat the same process.
This is why this article will tell you all the things that you need to have ready while purchasing a new car insurance policy, or switching to another one. Along with that, we’ll give you some expert tips on getting the best policy for your car and saving some money by making smart choices. Let’s get started.
Things You Need to Have While Purchasing Auto Insurance
When buying an auto insurance policy, know that the vehicle insurance company needs all the relevant documents related to your driving and your car. So anything that connects the two will be needed. It is better that you take anything relevant to your car or your driving with you as some companies might need something extra.
Here’s the list of everything you need to have when purchasing a car insurance policy:
Your Driving Record
Your driving record is one of the most, if not the most important piece of document that the insurance company considers while selling you an auto insurance policy. It might depend on the company, but some companies can take your driving record via your CLUE report. This report contains around 7 years of your driving history, all the traffic violations, speeding tickets, DUI charges, etc.
Your driving record helps the insurance company decide the price of the policy. People with a bad driving record have to pay more.
Ownership Permit/ Lease Agreement
If you have bought the car, you’ll need to show a vehicle ownership certificate that has the vehicle identification number of the car and your registered name, basically saying that you are the legal owner of the car. It goes without saying how important this document is. No auto insurance company will sell you auto insurance without this document.
If you are leasing the car from some company, then instead of an ownership permit, you’ll have a proper lease agreement that proves that you have taken the car from the company legally. This document has all the relevant information such as the company that’s providing the vehicle, etc.
Drivers License Number of Family Members
Any person in your family who has a driving license must be included in the auto insurance policy. No, it isn’t necessary or mandated by the law, but a smart thing to do. Normally, your car might be driven by someone else in your family at some point. But if they crash your car, the auto insurance company can and will reject your claim if they are not added as a registered driver in your policy.
So it is better to add all the people in your family as registered drivers in your policy so that no matter how the car crashes, your insurance company covers the costs.
Insurance Claims of the Past x Years
The auto insurance company would also require you to disclose all your previous auto insurance claims. This could be from the past 5 years, or 7 years, or even 10 years. It depends on the insurance company how far they want to go back. So keep all the relevant papers ready that contains the date of the claim, the insurance claim payout, etc.
Past insurance claims increase the cost of your new insurance policy. This is because according to insurance companies, people who have already made a claim are more likely to make an insurance claim again.
Documents of Current Insurance Policy
If you are switching policies, then you’ll have to bring the relevant documents that contain details of your current auto insurance policy. A pro tip here for the people who are switching policies. Do not cancel your previous car insurance until your new insurance is properly active.
For the monthly insurance premium, the auto insurance company needs to have a document proof showing that you can pay the premium. This could be done via a void cheque, or more commonly, your credit card. You’ll have to make a payment to show that the credit card is valid and active.
As mentioned before, some companies might require you to bring something extra as well. So you should give them a call beforehand and get all the details. The policies that you’ll be looking at would be liability coverage, collision coverage, comprehensive coverage, personal injury protection, and uninsured/underinsured motorist coverage.
If you have a new car, then do not miss collisions and comprehensive coverage. But if you get auto insurance for an old car, and if the car is over 8 years old, then getting collision or comprehensive coverage would be a waste of money. You are better off paying for the repairs from your pockets than making an insurance claim, paying the deductible, and increasing your insurance rates after.
Coming to deductibles, if the policy is for someone who is new to driving, or has a higher risk of getting in a car accident, keep the deductibles low. If the chances of a car accident are low, or the driver is experienced, then keep the deductibles high. This will help you save a lot of money in the long run.
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