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How To Review Your Current Auto Insurance Policy
So many drivers choose to stop thinking about their car insurance coverage the minute they purchase their policies. Many others don’t think about their policies until something changes, for example their teen begins driving or they buy a new car and have to reconsider their coverages.
However, never thinking about your policy, or only thinking about it when a significant change takes place, could prevent you from saving money or ensuring you've got the right auto insurance coverage for your needs.
7 Factors to Consider When Reviewing Your Car Insurance Policy
1) Drivers Covered
Since you bought your policy, there may be more or fewer drivers in your home.
Talk with your agent about making sure you have the right amount of car insurance if any of the following changes have taken place:
- You got married or divorced.
- You've moved in with a roommate, or your roommate has moved out.
- Someone formerly on your policy is now deceased.
- Your teenager started driving, or your child bought his or her own insurance policy.
2) Vehicles Covered
Vehicles change, so it’s important to make sure you still have the right kind of coverage.
If you bought a new car with the help of an auto loan, you can bet your lender made sure you have the right kinds―and amount―of coverage.
However, if you bought a vehicle with no financial assistance, or your vehicle has gotten old, you might not need the same types and amounts of coverage than if you bought a new vehicle. For example, most lenders require collision and comprehensive for loaned/leased vehicles but those coverages may not make sense if your vehicle is no longer worth much.
If you want to save some money, talk with your auto insurance agent about the best car insurance coverage for you and whether downsizing your policy is a good idea.
3) Coverage Types
Your car insurance policy must meet your state's minimum requirements for coverage (or you must have an acceptable alternative, if your state provides one). However, you may want to add more coverage than is legally required based on your assets and your risk tolerance.
For example, you might want to:
- Add collision and comprehensive coverages if you bought a valuable car (most lenders require these coverages) or added a teen driver.
- NOTE: You might want to get rid of those coverage types if your car’s getting older and its value is declining.
- Add emergency road assistance coverage if you or someone in your family (say, a college student) started traveling a lot.
- Add gap insurance if you just purchased or leased a vehicle, or drop the coverage if you paid off your loan or no longer lease.
Talk with your agent about any changes in your vehicle(s) and drivers to find out if there are any coverage types you should have―or no longer need.
4) Claims Processes
Even if you’ve never had an auto accident, understanding your car insurance provider’s claims process is crucial.
To refresh, sit down with your policy paperwork and read up on how your provider handles claims. Or, visit your provider’s website; many include instructions on how to file car insurance claims and even systems to allow you to file online. Of course, you can always contact your agent, too.
Make sure you understand the following.
- The exact steps you need to take immediately following the accident/incident.
- Whether you’re supposed to file and obtain a copy of a police report.
- How long you have to file the car insurance claim.
- When, and where, you should take your vehicle for repairs.
- How long you can expect to wait for reimbursement.
- How filing a claim will affect your auto insurance rates.
5) Income Changes
The more money you make, the more coverage you might want to purchase; the less money you make, the less you may need. For example, if you don't have enough car insurance to cover the other driver's damages, your assets may be sought in court to cover the rest. In a major accident, large assets such as your home, can be at risk.
Just make sure you keep enough coverage to meet your state’s requirements and protect your assets.
6) Discount Status Changes
Have you (or your teen) taken a driver training or driver's education course since you first bought your policy? Has your number of annual miles decreased? Did you install any anti-theft or other safety devices?
These are just a few of the common types of auto insurance discounts most providers offer. Visit your company’s website or speak with an agent specifically about the discounts available and the ones for which you might be eligible.
7) Other Coverage Needs
Have you purchased a home since you bought your auto insurance policy? What about a motorcycle, boat, or RV? Most car insurance providers offer multi-line discounts, which means you could save money if you insure your home and/or any other vehicle you own through the same company.
Making Changes to Your Auto Insurance Policy
Typically, it’s pretty easy to make the necessary changes to your car insurance. Your provider might allow you to make these changes online via your customer account, or you might visit or make a phone call to your insurance agent for a quick policy spring cleaning.
If things start to become a hassle though, or if your company doesn’t offer discounts other companies say you should have, consider shopping for a new insurance provider. Switching carriers is usually pretty easy; just make sure you don’t cancel your current policy until your new one is in place.