How to Choose the Best Car Insurance
It’s fun to research buying a car — scrolling through all the available makes, models, and colors as you picture yourself cruising in the vehicle. But shopping for car insurance? Not as exciting. Don’t worry, though, when it comes to how to choose the best car insurance, we’ve got you covered.
Check out our guide on the best car insurance, and consider reaching out to your local credit union as an additional resource. But wait, do credit unions offer car insurance? Yes, many do! And, with the discounted rates you’ll often receive through credit union car insurance, you might find you have the cash to spring for those upgraded rims you’ve been eyeing.
How to Choose the Best Car Insurance
Almost every state requires drivers to purchase a minimum level of car insurance coverage. But why settle for the bare minimum when you and your ride deserve the best? Let's explore the main types of car insurance coverage and factors to consider when choosing the best car insurance plan for you.
Types of Car Insurance Coverage
Car insurance coverage falls under two main umbrella categories: basic and additional.
Basic car insurance
Basic coverage covers, well, your basic necessities. Here are some of the car insurance protections you can’t drive without:
- Liability: Liability coverage is mandatory in most states. There are two types of liability coverage: bodily injury and property damage. In the event of an accident, these coverages help pay for costs related to another driver’s injuries or damages to property. It’s important to note that liability insurance does not cover your injuries or damages, only those of a third party.
- Uninsured and Underinsured Motorists: Reading this indicates you’re taking the time to pick out the best car insurance, but not all drivers do. Uninsured and underinsured motorist coverage steps in to cover costs when a driver doesn't have any or enough insurance to pay for your damages. Think of it as a backup plan for when others fail to act. This type of insurance is optional in some states. However, it’s a good idea to carry it.
- Personal Injury: Personal injury protection (PIP) insurance covers the cost of your injuries in the event of a car crash. However, many plans will also cover additional expenses related to your injuries, like lost income protection and childcare reimbursement. Personal injury insurance is not required in all states. If you opt for credit union car insurance, your local credit union’s car insurance provider will inform you of coverage requirements.
- Comprehensive and Collision: Comprehensive and collision coverages look out for your ride. Comprehensive pays for damages caused by theft, vandalism, hail, and other non-accident related claims. Collision coverage pays for damages caused by collisions with other cars or objects. While comprehensive and collision coverages are optional, many lenders require you to carry them until you pay off your vehicle. These insurances will help cover the costs to repair damages up to the car’s cash value.
Additional forms of car insurance
Who doesn’t like a little something extra? These other coverages are not required but can offer additional forms of protection.
- Roadside Assistance: Have you ever been stuck on the side of the road and had no idea how to change your tire? Consider roadside assistance coverage as help on speed dial. Roadside assistance deals with the unexpected, including changing a flat, replacing a battery, and towing your vehicle to an auto shop.
- Rental Car Reimbursement: If you get into an accident, your car may be stuck at the shop for a while. Rental car reimbursement insurance helps cover the cost of renting replacement wheels while you wait. It sure beats walking!
- Gap Insurance: Your car starts depreciating in value the minute you drive it off the showroom floor. So, what happens if your vehicle gets stolen or totaled and you owe more than what it’s worth? Gap coverage steps in to pay off the remaining amount of your loan or lease, so you don’t have to worry about paying bills for a car you no longer have.
- New Car Replacement: If your new car gets totaled in an accident, basic insurance plans only cover its value at the time of the crash. So, you may need more cash to cover the cost of a new ride. New car replacement coverage replaces cars with brand-new models. However, this type of insurance is only suitable for cars that are a few years old and doesn't cover older vehicles.
4 Steps to Choose the Best Car Insurance
Now that you know the coverages available, you can assess and choose the best car insurance for your ride. Here are four factors to consider:
- Embrace your unique needs. Go for the coverage that fits your specific circumstances. For example, if your vehicle is paid for, you won’t need gap insurance. However, if you just bought a new car, you may want to add gap and new car replacement to your plan. You can also look into other types of insurance to further broaden your protection.
- Consult with trusted third-party ratings. While insurance company websites have extensive information on plans and coverages, it’s worth taking the time to read reviews on trusted third-party sites. In addition, you can ask your friends about their insurance company experiences.
- Determine how you want to interact with the company. Larger insurance companies will most likely offer support through their website or app, while smaller companies may rely on the phone and in-person meetings. Decide what you prefer.
- Get multiple quotes and compare based on coverage. Shopping quotes doesn’t automatically mean choosing the cheapest policy. When reviewing options, look at the fine print and assess the benefits that come with each plan. It can be beneficial to meet with an insurance guide. When you look into credit union car insurance, you may find you qualify for discounts that aren’t available online or learn that you can better tailor your plan.
Further Resources on How to Choose the Best Car Insurance
Need more help choosing the best car insurance? We’re coming through with these handy resources:
- Learn what coverage is required in your state. The Insurance Information Institute has a helpful state-by-state list.
- Know how much your car is worth. Check out a guide like Kelley Blue Book to ensure you’ve got the right amount of coverage for your vehicle’s value.
- Compare car models side by side. There are plenty of easy-to-use comparison tools online, like this one from Edmunds.
Why Credit Union Car Insurance May Be Your Best Option
Now you know what to look out for when choosing the best car insurance for you, but it’s still helpful to have a copilot pointing out signs along the way. (We’ve all missed an exit while jamming out to our tunes.)
Many credit unions partner with top car insurance providers to bring their members exclusive discounts and round-the-clock service. Use our Credit Union Locator Tool to find a credit union near you that can help guide you to the best car insurance that fits your financial needs.