Buying Your First Car Insurance? Here Are Some Tips

Car Insurance

Buying your first car insurance policy can be a stressful time in your life, especially if you are not sure how to approach the task correctly. That is why you are here, though, to get some of the most valuable tips so you can cruise right through the process. 

Just keep in mind that your friend’s policy may not be the right one for you. You must know your budget, which shows how much you can afford to pay for the policy as long as you stay over the legal requirements in your area. 

Let’s check out some of the best tips so you can make an informed decision on your policy.

  • Types – Perhaps the most crucial part of the process is understanding the types of car insurance available and knowing what each is for. 
  • Compulsory Third Party (CTP) Insurance – This is the level of insurance that you are required to have by law. It covers any injury or death to the third parties involved in the accident. 
  • Third-Party Property Insurance – When the accident is found to be your fault, this section of the policy will cover any damages to the third party’s property, including their vehicles. It does not cover any damage to your property or car.
  • Third-Party, Fire, And Theft Insurance – This car insurance policy will cover any property damage you cause when an accident is your fault. It will also cover the cost of repairing your car if it is damaged during a theft or fire. Still, it does not cover damage to your vehicle in an accident.
  • Comprehensive Insurance – This is the best coverage you can get when added to the required CTP policy. It covers the cost of damage to any property involved in the accident, including yours, even if it is your fault. It will also cover any damage to your vehicle if it is stolen or broken into. Plus, it covers damage due to fire or any other type of natural disaster.
  • Compare – Never think your first offer is the best you can get, especially since you will pay more for the insurance policy simply because it is your first time buying any. You want to go to a comparison platform, such as iselect.com.au, where they will make all the comparisons for you. They will run some basic information through the platform and send you offers from some of their partner sites that will work with you. All you have to do is go through them and pick the one that is the best for your specific circumstances.
  • Read – This has been mentioned before but is important enough to repeat. You must make sure that you read the entire offer, especially the small print. See what exclusions and additions they have added and ensure that nothing will negatively affect you if a claim ever needs to be filed. Don’t assume that the policy will work and find out the hard way later down the road.
  • Deductible – Even though this number will already be set in the offer, you can adjust it to better manage the costs. If you increase the excess amount you will have to pay, the premiums will go down, but you will be liable to pay more if you file a claim. If you decrease this amount, your premiums will go up, but you will not have to spend so much out of your pocket. Be very careful when adjusting this number because it may look great to max it out to get your premium costs down, but you will regret it later on if you get into an accident.
  • Understand What You Need – Comprehensive insurance, along with CTP coverage, is the best you can get, so it may seem like an easy choice when getting your first insurance policy. That is not always the case, though, unless you have enough cash left after your bills to pay for it. What is meant is simple; if the car you are insuring is old and can be replaced easily, it may not be worth the cost of having the best coverage. It may end up costing you more than what the car is valued at. On the other hand, if you drive a new sports car, the only option is to get comprehensive.

You need to take the time to analyze your specific financial position and needs. When first getting insurance, you will have a higher premium than others, but if you pay on time and avoid filing any claims, the cost will slowly come down. 

On that note, remember that the more claims you file, the higher your premiums will go. Only file a claim when you need to. Otherwise, fix the damage yourself if it will not cost too much time or money. 

When choosing the perfect insurance for yourself, ensure that the policy benefits match your needs and select the most affordable one. Never automatically go for the cheapest offer because the coverage may not be very good. Take your time, read through everything, ask questions, and make an informed decision before signing any contract.

Opinions expressed by San Francisco contributors are their own.

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