Do I Need Comprehensive Insurance If I Finance My New Car?

Reader’s Question:

If I will finance the purchase of my car here in South Carolina, why is it so important for me to get comprehensive and collision coverage for my car insurance?

Danny

Charleston, SC

The required auto liability insurance would only pay for the damages on the other vehicle in an accident that you are at fault. In this case, the damages on your car would not be covered by your own car insurance. For that reason, the finance company who gave you the loan on your car would require you to purchase collision and comprehensive coverage.

Collision coverage would be the one to pay for the damages on your vehicle that are sustained in an accident that is your fault. Comprehensive coverage would pay for the damages that are caused by natural disasters such as fire, hail, etc. In case you hit an animal, the comprehensive coverage would also pay for the damages on your car. If you put together a complete coverage for your car insurance in South Carolina, the collision and comprehensive coverage must not be more than the fair market value of your car and must not be less than what you owe to the finance company. You have to check with the finance company if you owe them more than the fair market value of your car.

If you have figured out how much is the minimum liability coverage that you need and you have figured out the minimum amount of comprehensive and collision coverage that you need as well as your deductible, then you can now go online and search at least three various websites that would allow you to compare the costs of auto insurance policies from different insurers.

Tips For Getting Cheap Car Insurance For Your New Car

Reader’s Question:

I’m going to buy my very first car next month. Can you give me tips on how to choose or what to choose so that I can obtain a cheap car insurance?

Dan

Louisville KY

It’s a good decision to consider how much insurance you will have to pay before buying a car. Insurance costs a lot these days that to get a cheap car insurance is a tricky business. Since the type and model of the car will affect the insurance premium, you must choose a model 1997 or something later than that. While older cars than 1997 are less expensive, they can ultimately cost you more for insurance premiums.

If you want cheap car insurance, later models will be a good choice as they also come with safety features, like an airbag, sidebag and roll stability. Insurance companies are particular on these things. The more safety measures the cars have, the better it will be for the premium computation. Another important thing to remember is on the car’s speed. Fast cars are associated with speeding, and speeding to accidents. In this regard, choose a car that has a 4-cylinder engine with an average horsepower. Making these two important considerations can go a long way into giving you a cheap car insurance. Finally, check with local insurance providers how much will they usually charge a particular model before buying one.

Do I Need More Auto Insurance For My New Car?

Reader’s Question:

I have a loan on my new vehicle and I was told that I will be required by the finance company to purchase extra insurance coverage on my new car, why is that?

Emil

Knoxville, TN

If you have a loan on your vehicle, the finance company would ask you to purchase extra insurance coverage. For instance, aside from the auto liability insurance, the finance company would ask you to buy collision and comprehensive insurance coverage that would provide coverage for the value of the loan that you have taken, and you would likely be asked to buy Uninsured Motorist coverage for the protection of the car against damage by another motorist who doesn’t have auto insurance or who doesn’t have enough insurance to cover the damage to your car.

The finance company would ask you to buy collision and comprehensive coverage since the required auto liability insurance would only provide coverage to other cars in the event of a car crash but would not provide coverage for the repair or replacement of your car. Collision insurance, as the name entails, would pay for the repair or replacement of your car in case it sustains damage from a crash with another car or with still object like a lamp post, especially if you were believed to be the one responsible for the crash. On the other hand, the comprehensive insurance would pay for any damage to your vehicle that is due to natural causes such as flood or storm.