You just bought your first car, and you're thrilled because you see it as a sign of independence and a way to get around. But have you thought about the fact that you now have new responsibilities, one of which is insurance?
What should I know about car insurance?
Car insurance is a financial tool that protects you from losing money if your car is in an accident. This is why the saying goes, "It's better to have it and not need it than to need it and not have it."
Even though it's important, a lot of Mexicans don't buy this insurance because they think it's too expensive, they don't understand how it works, they don't know where to get it, or they don't think they need it. Getting car insurance should not be seen as a requirement, but as a way to protect yourself in case of an accident or theft.
But, according to the Law of Roads, Bridges, and Federal Transportation, every driver must have at least civil liability insurance to drive on federal roads and bridges and in cities and towns. If they don't, they may have to pay a fine and show proof of insurance to get their car back.
What influences the cost of car insurance?
As with other financial products, it's important to think about how you plan to use your car when buying insurance. For example, you won't need the same protection if you plan to drive to and from work every day as if you plan to take a lot of road trips. Here are some things that affect the price.
Insurers figure out how likely an accident is by looking at the driver's age, whether or not they are married, and how long they have been driving.
The model and make of the car can affect the price of a policy, since insuring a compact car is different from insuring a pickup truck. The risk of theft, the cost of repairs, the safety features of the car, the size of the engine, and even the damage that could be done to other people in an accident are all taken into account.
Three types of coverages cover various damages.
Basic coverage: This is the minimum coverage you must have to follow the law. It covers damages you cause to third parties (their car, house, fence, etc.) and physical damages and compensation if the people in a third party's car get hurt or die.
Limited coverage: If you buy a policy with this coverage, you will be covered for the total theft of your car, civil liability (damages caused to a third party), medical help for the driver and occupants of your car, and compensation for the death of the driver/insured in the policy. Some insurance companies give you roadside and legal help if you get into a small accident. They may also extend your civil liability coverage if you are driving someone else's car.
Broad coverage: With this insurance, you can count on a more complete level of protection, since you can add things like guaranteed bail, material damage, deductible refund, and special equipment, among other things, to everything that was covered by the limited coverage. Even if you pay a higher premium, you can count on getting a substitute car within 10 to 30 days if you get into an accident.
This kind of coverage is best for people who drive new or luxury cars, or cars that are less than 10 years old because repairs and replacement parts are more expensive. But if your car is more than 10 years old, you should get a different type of coverage because the deductible could cost you more than what it would cost to fix your car on your own.
Location: Believe it or not, the places you plan to go affect how much your car insurance will cost. This is because cities with a high crime rate add a risk factor, especially for rental cars.
Deductible: Like any other insurance, you need to think about the deductible. For example, if you get into an accident, you'll be charged a percentage of the total cost of the repair. If the repair costs $50,000, the 10% deductible you'll need to pay is $5,000 so they can fix it. Because of this, it is best to buy insurance with a modest deductible.
Car insurance tips
If you have auto insurance, you can protect your investment, pay for damages caused by theft or natural disasters, and cover losses caused by drivers who don't have insurance or don't have enough. Most importantly, it will help you protect your financial stability and give you peace of mind in case you get into an accident. Here are some tips to help you find the best car insurance for your needs.
You should carefully read your policy's terms, coverages, and exceptions. For example, your insurance won't cover you if you don't have a driver's license or if you've been drinking.
Make sure you don't buy extra services you don't need when you buy your policy, as this will only make the cost of the policy go up.
As with any other financial product, you should always look at what different insurance companies have to offer and compare them so you can get the insurance that best fits your needs.
Check out what other people have to say about the insurance company you're thinking of signing up with. This will give you an idea of how the service will be provided.