How To Successfully Purchase Insurance For The First Time

 In Financial Planning, Insurance Advice

How To Successfully Purchase Insurance For The First Time

Transitioning from being on your parents insurance to having your own can seem a bit frightening. Here are a few tips to help guide you in the right direction when finding the insurance that works for you.

Understand the basics: Liability Insurance is the state law. If you drive without insurance and get pulled over, you will be ticketed.  The punishment is a fine and a suspension or zero days.  Get caught a second or third time and the suspension and fine increases to 90 days ($200) and 1 year ($400) 1.  When purchasing insurance, you will need to pay a premium to purchase liability coverage.  Insurance policy terms are either 6month or 1 year.  After this period your policy automatically renews as long as you pay your premium.   When it comes time to renew, evaluate your policies and determine if you need to make any changes.  If you have trouble remembering to pay your bill set up a recurring calendar reminder or setup your payment on EFT.

Shop around for the best rates: Explore all of your options to find insurance that works for you and your budget.  Look for companies online or ask around who your friends use.

Find a company who is:

  • Easy to get in contact with in case of an accident
  • Your are comfortable with the agent or representative
  • Understands your needs
  • Can explain your coverages to you
  • An independent agent who writes business for multiple companies

Determine your needs: It is important that you know ahead of time what your specific needs are.  There are several components to a car insurance policy.  There is liability insurance, which is required to have in every state, and will provide coverage if you are at fault in an accident where an injury or damage occurs. Liability coverage does not pay for your car or any of your injuries. Collision and comprehensive insurance provide coverage for your vehicle and Medical Payments covers you and your passengers.2  Un-insured motorist and underinsured motorist cover a driver who may hit you who doesn’t have insurance or doesn’t have enough insurance.  There are different coverage amounts available.  The minimum for Missouri is $25,000 but our advice is to get the most coverage you can afford.  You don’t know what can happen.

Look out for:  You may come into the situation where you want to let someone else drive your car.  The insurance follows the car- as long as you have your car insured anyone can drive it as long as they have a valid driver’s license and your permission.  If they get into an accident it will be on your record along with the hassle of getting your car repaired.  If your roommate or friend is going to drive your car on a normal basis you should add them onto your policy as a driver.  You can split the costs and any accident they have will go on their record.  

Ask about discounts:  Insurance is not cheap, but there are a few tricks you could try when it comes to getting a better price. First, ask your agent if there is any kind of discount for having a clean driving record. Next, if you want to stay with the company used by your parents, you could ask if there is any kind of loyalty discount. Third, if you are in college and have a good GPA (3.0 or higher), some places may offer a discount for being a good student. By setting up EFT, you could possibly save on payment fees, and some companies will give an additional discount for having your payment automatically withdrawn from an account.  If you are renting an apartment they may require Renters Insurance.  Having both your car and renters insurance with the same company will also give you a discount.

These are just a few things to consider. To learn more, stop by our office or give us a call anytime 417-882-1800

Sources:

“What Is Covered by a Basic Auto Insurance Policy?” III, www.iii.org/article/what-covered-basic-auto-insurance-policy. Accessed 29 Aug. 2017.

“Missouri Driver Responsibilities and Penalties.” Missouri Department of Revenue, dor.mo.gov/drivers/insurance/drivers.php. Accessed 29 Aug. 2017.

We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. We are able to provide you with information but not guidance or advice related to federal benefits. Our firm is not affiliated with the U.S. government or any governmental agency. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. AW12175556

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