Which Type of Auto Insurance is Right for Me?

Whether you're choosing Direct, Ais, Titan, or some other auto insurance provider for your coverage, you're going to have to decide which types of coverage are going to make the most sense for your situation. Below we'll look at some common scenarios and which coverage would make the most sense.

Getting Insurance for a New Car

If you've just purchase a brand new vehicle, you're going to want full coverage. In fact, if you've financed that vehicle, you're probably required to carry this type of coverage on the car. Generally, you'll be required to purchase at least the state mandatory amount of liability coverage (in some states, you may have to take on more than the minimum required if you've financed the car). Plus, you'll have to maintain both collision and comprehensive coverage on the car until the loan is paid off. Obviously, that means your auto insurance is going to cost more. However, you might also want to consider GAP insurance as an optional add-on so you don't end up owing the bank large sums of cash after being involved in an accident.

Having an Older Car

At a certain point in the life of your vehicle, its value will have declined to the point where carrying full coverage would no longer make sense. The best way to make this determination is to check the blue book value of your car then compare it to the cost of the premiums you're paying just for types of auto insurance. If your beginning to pay more in premiums than what your car is worth, it's time to drop the additional coverage and stick to just liability. Remember that you usually can't drop that additional coverage as long as there is a loan on the vehicle. In some cases, full coverage may still be required if you've used your vehicle as collateral for a personal loan, too.

Insuring a High Risk Driver

High risk drivers are individuals who have been responsible for more than one car accident within a short period of time. Different auto insurance companies have different standards for what they consider "high risk." Some companies also look at traffic violations. Because of the high costs of insuring these drivers anyway, you should stick to liability only. Allow them to drive the less valuable car and encourage them to complete a defensive driving course which might help lower their rates.

Driving a Lot

Some people are just going to be on the road more than others. If you have to drive a lot for work or to stay in touch with family members, you are increasing your risk of being involved in an accident. For this reason, full coverage is going to make a lot of sense, especially if you're driving a newer vehicle. You should definitely consider adding emergency road service and rental car policies, as well. Although your auto insurance probably won't be very affordable unless you receive some great discounts, you'll find these extras to be very valuable when you're on the road.