Getting vehicle insurance quotes is easy, what with quote aggregators, direct insurance companies and brokers all offering to do the legwork. It’s not as easy to compare vehicle insurance, though. The short-term insurance market is competitive which makes comparing vehicle insurance complicated as each insurance company provides their own policy with a range of unique benefits.
While some benefits may appeal to you over others, do not forget the point of vehicle insurance, namely to mitigate your risk of owning a vehicle. You want to choose a policy that leaves you financially secure after a peril occurs without paying more than is necessary. Here’s how to compare vehicle insurance:
Compare vehicle insurance policy perils
A good vehicle insurance policy is not the one which covers the most perils, after all, a vehicle used for business purposes isn’t likely to experience off-road damage. Besides, insurance policies which cover all perils are expensive. Compare vehicle insurance policies by looking for those that cover the likely perils, such as accidental damage, theft and third party liability. In fact, it’s a good idea to write down a list of perils that you are at risk of, and then prioritize these into the most and least likely and then into the most and least expensive. You’ll want an insurance policy that covers the most likely and most expensive perils, while self-insuring for the less likely and less expensive perils.
Compare vehicle insurance policy extent
Extent refers to how much the insurance company will pay out in the event of total loss. That is, the most the car insurance company will ever pay to you. This varies from insurance company to insurance company. Often those companies promising the cheapest premiums, pay out the lowest amount. As car values change, the extent on your vehicle insurance policy is not static; it fluctuates.
Insurance policy thus list the value in terms of market, retail or trade. If the car is covered for the retail value, it will pay out what it is worth if sold from a dealership, while market price is what it is actually worth.
Most insurance companies will only pay out market value of the vehicle, which is cheaper than retail and more worthwhile than trade.
Compare vehicle insurance premiums
Once you’ve selected a few policies that cover your likely perils and are prepared to pay out a reasonable amount, check the premiums. Are these affordable? If not, can the excess or deductible be adjusted to make these more affordable? Don’t put yourself in a poor financial position for insurance, otherwise it defeats the purpose.
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