The 3 Most Important Factors You Might Not Know About Auto Insurance

Everybody must have car insurance — it’s just that nobody wants to pay for it. That’s just the way it goes, even though we all see the value and benefits it provides.

The good news is that, with a little bit of smarts and knowledge, the process of getting auto insurance can be streamlined and made much easier. Just like going to the dentist, it will probably never be your favorite activity. But you must get it done, and it really can be done pain free.

And, if you do it right, you can even keep costs as low as possible while also getting the best coverage around. The key is understanding the big factors involved in the process. To help shine some light on what to expect, the following represent just a few of the keys to remember as you look for a new policy.

1. Auto Insurance Can Be Very Affordable

People often talk in absolutes when it comes to car insurance. But the rate any individual pays is usually quite different from their friends and family — even on the same policy with the same company. And in many cases, it can actually be affordable for you despite what everyone else keeps complaining about.

Among the biggest aspects that will determine your rate are your driving history, credit score, age, marital status and the type of automobile you drive. A 22-year-old in a Corvette who has five accidents and two bank liens will get dinged a lot more each month than the 55-year-old soccer mom in a Subaru who has never gotten a ticket.

2. Location Matters

Most people are aware certain risk categories, and especially their safety record on the road, play a big factor in how much they will pay. But one other thing to understand is that rates can also vary greatly in North America depending on your location.

How much does it cost to insure your care in New York? What are the rates in Los Angeles? How much does auto insurance cost in Toronto? Much like your driving history and the type of vehicle you own, where you drive matters. And if you search around, you can check various zip codes to get an idea of how much you might have to pay at home (or in a new area if you’re planning a move sometime soon).

3. There Are Many Coverages Available

A lot of people would forego insurance altogether if it wasn’t legally required. Doing so would be foolish. But some wild souls like to live on the wild side — and risk their financial future on what is usually dumb luck. But almost everywhere in North America, with the exceptions of a few places like New Hampshire and Virginia, you need to have at least some coverage, usually in the form of a liability policy.

Still, there are many more options to consider (and in some places, others are compulsory as well). Really, there are too many to detail here, but many people decide to go all in and opt for comprehensive coverage. This means you’re protected against almost anything. Then there are lesser — but still advisable — options, including the popular collision policy, personal injury protection, property damage liability and bodily injury liability. The goal is to understand what is and what is not covered by each and make an informed choice that works for you.

Knowing What Auto Policy to Purchase

Your personal circumstances, home location and appetite for risk are the three biggest factors that will determine what auto insurance policy you end up getting. As a rule, most experts advise people to get the most comprehensive coverage they can afford. Of course, nobody wants to pay more than necessary, but there is something about knowing you are as protected as possible that helps you sleep at night.

The secret to getting the best deal and the right policy for you is knowing the most important factors involved in rate-setting. Consider your circumstances, look up your zip code for average pricing in the area, and think about how much coverage you really want.

Outside these issues, most of the rest is just details that don’t move the needle all that much. So, your goal should be to make sure you get a good understanding of what really matters. That way, you can drive with confidence knowing you’re safeguarded against disaster without putting any unnecessary stress on your wallet.

Emily Muelford
Emily is a British writer whose love of car culture is augmented by a fascination with both the European and American automotive markets. Her perspective is uniquely fish and chips.