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That newest model of your favorite car has just been released, and you are in the market to buy or lease one as soon as possible. However, when you buy or lease a new car, you will need to have car insurance coverage prepared and in force before you drive off the lot. A car insurance policy contains many options, such as a choice of deductible, amounts of liability, and medical benefit coverage. Each option affects the total premium you will pay for the insurance coverage. And some coverage options are required by state law, as well as by the auto dealer, who sponsors the lease or bank that provides the purchase price for the vehicle.
Deductible for car insurance Your deductible amount has a tremendous impact on your car insurance premium. A deductible is an amount that you agree to pay out of your own pocket before the insurance company begins payment on a claim. A larger deductible lowers your premium amount, and conversely, a lower deductible value results in a higher insurance premium. A car insurance company will generally offer deductible options of $100, $500, $1000, $2000, etc. You should choose the deductible option that you could most comfortably pay in case of an accident. Remember, auto insurance is a risk benefit. You do not enjoy a benefit unless you are involved in an accident or damage occurs to your car. You may choose to carry more risk yourself and choose a higher deductible, therefore lowering your premium amount.
Typical required coverage Remember, some insurance coverage options are required by your state government, and some are required by your lien holder or the leasing company. Typically, you will be required to have "full coverage," which may include all or most of the following coverage policies: * Liability - This coverage is usually required by law in most states. Check with your state law, as well as the leasing or financing company, to determine what the minimum amount of liability you must include.
* Collision
* Comprehensive
* Medical
* Personal Injury Additionally, your leasing or finance company may require these supplemental coverage policies as well: * Uninsured Motorist
* Underinsured Motorist
* Rental Reimbursement
* Towing and roadside assistance A leasing company will also want to have "gap" insurance. If your leased vehicle is totaled in an accident, the full replacement value is generally less than the amount of money you owe on the lease contract. Gap insurance will cover that loss for the leasing company. However, generally leasing companies carry their own gap insurance and require you to pay the premium as part of your monthly lease payment. Buying or leasing a car takes a lot of consideration for the price you pay each month. But remember that a new car requires tremendous insurance that you also pay from your own pocketbook. Be prepared with the right coverage options when you go in to lease or buy your next car.
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