How to Manage Your Car Insurance Policy? A Complete Guide

November 22, 2022
Photo by Erik Mclean on Unsplash

Car insurance policies are far from being simple, easy, and, most of the time, affordable. There are so many factors associated with buying and managing car insurance that it is impossible to find one solution that fits your needs. 

Just think about it, some mandatory car insurance policies like liability insurance are mandatory in almost every state in the US. Then there is the personal injury protection plan that is mandatory in all the 12 no-fault states. 

Fourteen states also require you to get uninsured motorist coverage as well. Even if you do not live in a state where these policies are not mandatory, they are still significant to insure you against the various car accident costs. 

Collision and comprehensive insurance are optional car insurance equal to mandatory insurance policies if you want to protect yourself from the cost of fixing your car. Naturally, the question arises; How to manage your car insurance policy? 

Let’s look at everything you need to do to manage your car insurance policies and avoid confusion or, worse, getting your policy canceled. 

Bundling Policies

A common practice that many people do and almost every insurance company recommend is called bundling. Bundling insurance policies means that when you have two or more insurance policies, you can get them from the same insurance provider. There are many benefits of doing this, along with some disadvantages. 

The best advantages of bundling insurance policies are ease of management and discounts. Since bundling requires you to buy all the policies (to bundle) from the same insurer, insurance companies offer discounts for bundling. Expect a discount of anywhere between 5% to 8%. 

The other advantage of bundling is managing multiple policies becomes a breeze. You don’t need multiple applications or log in to different websites to monitor your coverage policies. One app or website is enough to check the status of all your various policies. 

This ensures that you remember to pay insurance premiums and get your policy canceled. So bundling is one of the best things you can do to manage your policies efficiently, along with the added bonus of discounts. 

But only some things are remarkable about insurance bundling. The biggest drawback of this practice is getting locked with one insurance provider. For example, you have the liberty of choosing the best car insurance policy in your state. The one that offers the best policy at the most affordable rates. 

If you live in, say, Nevada, all you need to do is look for Nevada cheap car insurance companies, compare the prices and their coverage and select the best one for your needs. But if you were to bundle car insurance, you’ll have to get all your different insurance policies from the same company. 

Adding Drivers to Your Policy

Another vital car insurance management tip that many people either ignore or don’t know about at all is adding drivers to your car insurance policy. Adding drivers to your policy is crucial to avoid claim rejection and other financial losses. 

If the members of your family also use your car, and if they do not have their own car insurance policy, you need to add them to your policy as registered drivers. In case they are using your car and get in a car accident, and they are not registered in your policy, your auto insurer can and will reject your claim. 

Adding family members to your policy (your spouse or kids) will increase your insurance premium rates depending on the driving record and other factors of the newly-added driver. But that is better than paying thousands of dollars from your pocket.

Increasing Your Deductible?

Here’s something you might not know; car insurance premium rates are ever-changing. If you feel that you are paying a lot in premiums, consider increasing your deductibles. 

Deducible is the amount of money you need to pay first before the car insurance company pays the rest of the claim amount. So if your deductible is $1,000, and the claim amount is $5,000, then the insurance company will only pay $4,000 after you have spent $1,000. 

Increasing your deductibles will reduce the amount you pay in insurance premium rates. Decreasing your deductibles will increase your insurance premium rates. 

While this may sound great, there are some repercussions of increasing or decreasing your insurance deductible. If you increase your deductibles, it will reduce your insurance premium costs, but in case you get in a car accident, you’ll have to pay more from your pockets. 

But if you reduce your deductibles to pay less from your pockets when you claim your insurance, you’ll end up paying more for insurance premiums. So it’s a door that swings both ways. Assess how likely you are to get in a car accident and then change the deductible. 

Consider a Policy Management Service

Many policy management services come with applications that help you with everything crucial about your car insurance policy. You can access anything from these websites or apps from the renewal dates to the coverage limit. 

While most of these services are free, paying a few dollars a month to get all the data about your policy neatly in one place is worth it. Just make sure you choose a reliable and secure management service.

Keep Decent Coverage

Many people think that the state-mandated minimum coverage limit is enough to cover all accidents. But this is rarely the case. If your policy’s coverage limit is to match the state’s minimum coverage requirements, you are most likely underinsured. 

Car accidents can be costly. Make sure that your policy’s coverage limit is over the state’s minimum coverage limit. Increasing your policy’s coverage limit will slightly increase your premium rates but save you from spending thousands of dollars from your pocket if you get in a car accident. 

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