First-Time Buyer? Questions To Ask Before Buying Auto Insurance

Are you a first-time auto insurance buyer? If you're new to this type of insurance policy, take a look at the questions to ask before you purchase coverage.

Do You Need Auto Insurance?

If you own, lease, or finance a car, SUV, non-commercial truck, or other motor vehicle in Illinois, you need auto insurance. Not only does the state require you to carry an auto insurance policy, but this type of motor vehicle coverage can protect you from unnecessary expenses.

Even though you will need to pay for a policy, the money you spend isn't likely to exceed what you might need to pay after an accident. According to the National Safety Council, the average cost per vehicle of an accident that results in property damage is $5,700.

Accidents that include injuries can cost significantly more. The National Safety Council notes that in 2021 the average cost of disabling car crash injury was $155,000 and an evident (non-disabling) injury was $40,000.

Auto insurance can help to pay for property damage (including your car, someone else's car, someone's home or land, commercial or business property, trees, shrubs, or mailboxes) and medical costs (yours or someone else's expenses). Without coverage, you're left to pay for these costs and any potential legal expenses that result from a motor vehicle accident. The high price tag of auto repairs, medical expenses, and legal fees make it crucial to purchase a state-minimum auto insurance policy.

How Much Coverage Do You Need?

The first step to purchasing a policy is making sure that you comply with the state's coverage laws. This means you will need to buy a state-minimum policy. The minimum types and amounts of coverage vary by state. Illinois drivers need liability coverage that includes $20,000 property damage coverage per accident and at least $25,000 per person and $50,000 per accident bodily injury coverage.

Illinois motor vehicle owners will also need at least $25,000 per person and $50,000 per accident uninsured and underinsured motorist bodily injury coverage. Even though these are the state-required minimum coverages, you may want to purchase higher-amount policies or additional auto insurance.

Additional types of coverage that some motorists need or want include collision and comprehensive coverage. Collision coverage can pay for accident-related damage to your car after an incident with another car or an object. As the name implies, comprehensive coverage is a comprehensive (or full) policy. This type of coverage can pay for other causes of motor vehicle damage. You may need this type of coverage to pay for damage from theft, vandalism, fire, or wild weather (such as hail).

Do You Need a Low or High Deductible?

As someone who is new to auto insurance, you may not fully understand the deductible. Before choosing a policy, talk to your insurance agent about the options and what they mean for you, your overall costs, and your policy's premiums. Most policies have a higher premium to offset a lower deductible—and vice versa.

If you are a new graduate, starting your first job, in an entry-level job, in a lower-paying job, just moved out of your parents’ home, just bought your first home, or have a limited budget, a lower premium or higher deductible may make sense. But the lower upfront cost could come with unnecessary expenses. If you are in an accident, you will need to pay more per incident than with a lower deductible policy.

Do You Need Other Types of Insurance?

Will you only need to insure your car? If you plan on buying a home, don't have a life insurance policy, or need another type of coverage, ask your insurer about bundles. Some companies provide this convenient option to customers who have multiple lines of insurance. A bundle makes it possible to keep all of your insurance needs in one place. This eliminates the need to pay separate companies, have multiple online accounts, or use multiple agents.

Are you ready to buy an auto insurance policy? Contact Metropolitan Insurance Service Consultants, Inc, for more information.