Auto Sales are Surging – So Make Sure You’re Getting the Best Possible Insurance Deal!

Gavin Magor

September was a rock-solid month for the U.S. auto industry, with major manufacturers like Toyota (TM, Rated “C+”), General Motors (GM, Rated “B”), and Ford (F, Rated “C”) recording year-over-year new car sales gains of 15%, 12%, and 9%, respectively.

The spike stemmed largely from consumers whose vehicles were either destroyed or damaged during the recent hurricanes. Insurance checks arrived at the same time many dealerships and manufacturers offered attractive hurricane relief deals to those affected – making it a win-win for everyone.

If you were among those who purchased a new vehicle, or even if you’re still deciding what kind of car or truck to buy, you can’t forget to factor in your auto insurance costs. You may be able to afford the monthly vehicle loan payment, but if you don’t shop wisely, your insurance costs might really slow you down!

That’s where we at Weiss Ratings can help. Let’s start with the basics of auto insurance and how it works.

An auto policy is a contract between you and your insurance company to protect against financial loss in the unfortunate event that you have an accident. Depending on what kind of policy you purchase, your insurance coverage may provide financial assistance to:

  • Repair, or replace, your vehicle in the event it’s damaged or stolen.
  • Reimburse others if you cause an accident that hurts them or their vehicle.
  • Pay for any medical expenses arising from injuries you or your passengers sustain in an accident.

There are a lot terms thrown around when it comes to auto coverage. So, here are some major ones that you should know:

Bodily Injury Liability coverage for injuries you might cause to someone else.

Property Damage Liability – coverage for damage you might cause to someone else’s property.

Medical Payments or Personal Injury Protection (PIP) – coverage to treat injuries to you and your passengers, regardless of who is at fault in the accident.

Under-Insured and Uninsured Motorist Coverage – protection for you, your passengers, and your vehicle in case you have an accident with an uninsured driver, a hit-and-run driver, or a driver with insufficient insurance coverage.

Collision insurance that pays to repair damage to your car from a collision, regardless of who is at fault.

Comprehensive insurance that covers your car for everything that is not covered by collision insurance. This includes the cost to replace or repair your vehicle due to theft or damage from things like hail, water, flood, fire, wind, explosion, earthquake, animals, or vandalism.

Now that we have those basics out of the way, let’s talk about what you should do when seeking out coverage:

Shop around. The first mistake you must avoid at all costs is getting a policy with the first insurer you come across. Call at least three different companies as their pricing could vary significantly for the exact same coverage. They could also offer different discounts and incentives. Spend some time speaking with insurance agents, because it could save you hundreds, if not thousands, of dollars each year.

Know How Much Coverage You Need. Every state has different minimum coverage requirements that are generally expressed like this: 25/50/25. The exact numbers may differ, but this is what they mean: You must have at least $25,000 of bodily injury coverage for one person, at least $50,000 of bodily injury coverage for all parties injured in a single accident, and at least $25,000 of property damage coverage.

Bear in mind that if you hit a $100,000 vehicle, and you only have minimum coverage, you might end having to pay the difference out of pocket. Such an accident could result in litigation, which could lead to even heavier financial losses and major headaches.

The make and model of your new vehicle will have a huge impact on your insurance costs. Here are the ten least and most expensive cars to insure, as of 2017. Take a look at this list and keep it in mind when you go to buy a vehicle.

10 Least Expensive Vehicles to Insure in 2017

10 Most Expensive Vehicles to Insure in 2017

In addition to shopping around, comparing policies, and budgeting, don’t forget to check your potential auto insurer’s safety rating before making a final purchase decision. Your insurance company should always be able to pay up on time in case of an accident, and this step will give you added peace of mind.

Think Safety,

Gavin Magor

Gavin has more than 30 years of international experience in credit-risk management, commercial lending and insurance, banking and stock analysis and holds an MBA. Gavin oversees the Weiss ratings process, developing the methodology for Weiss’ Sovereign Debt and Global Bank Ratings. Gavin has appeared on both radio and television, including ABC and NBC as an expert in insurance, bank and stock ratings and has been quoted by CNBC, The New York Times, Los Angeles Times, and Reuters as well as several regional newspapers and trade media.