If you walk outside on Christmas morning to a new ride topped with a big red bow, remember to make sure it’s property insured before you take it out on the road. This is always true, of course, when you get a new car. But when you’re buying the car for yourself at the dealership, your lender will step in to make sure everything is taken care of before you leave the lot – that’s because it has too much at stake.
Similarly, the lender will make sure whoever buys the car as a gift is insured. But that doesn’t mean the coverage will automatically switch over to you when you receive the vehicle.
All states require you to be financially responsible when driving a car – most require you to purchase at least a minimum amount of liability coverage in case you cause an accident that results in injuries or property damage. But you also should consider several other types of coverage.
Insurance experts recommend that you shop around and compare quotes from different companies. Premiums can vary widely by auto insurance provider. While paying attention to price, it’s also a good idea to look at coverage, service, and the carrier’s reputation. Check out financial ratings and customer reviews from companies like A.M. Best and J.D. Power and Associates.
To make an educated decision when insuring your vehicle, it’s a smart move to familiarize yourself with the different types of coverage available.
Bodily injury liability: Gives you protection if you injure or kill someone while operating your vehicle.Property damage liability: This protects you if your car damages someone else’s property, including another vehicle.Uninsured or underinsured motorists: Helps pay for your injuries or damage caused by an uninsured or underinsured drivers, or in some states, a hit-a-run driver.Medical payments: Helps cover medical expenses of the injured driver and passengers in your car.Collision: This coverage helps pays for damage to your car if you hit another vehicle or object. You’ll be responsible for a deductible.Comprehensive: Helps covers losses, minus your deductible, resulting from incidents other than collision. For example, this covers damage to your car if it is stolen or vandalized.Rental reimbursement: This coverage pays for a rental vehicle when your vehicle is out of commission as a result of a loss covered under comprehensive or collision coverages.Even if you find a great policy at an affordable price, there are always more ways to save on your premium. Here are a few options if you are looking for a little extra green in your pockets:
Discounts are an available option for many drivers. For instance, you can often save up to 20% by simply bundling your home and auto policies with one provider.Safe driving is another way to cut down your premium. A clean driving record with no tickets or history of accidents means you are less of a risk for your provider and often leads to lower premiums.Increasing your deductible can also be a money saver, but you’ll want to weigh the consequences of this choice. Make sure your deductible is set at an amount you are comfortable paying in the event of a claim or you could be stuck in a bad financial situation.Once your policy is in effect, put your updated insurance information in the glove box of your car so that it’s easily accessible if you ever need it. Now you are ready to put the car in drive and cruise around town with the wind in your hair and not a care in the world. After thanking the gift-giver, of course.
Starting out his career as a journalist at a smalltime newspaper, Peter Caldwell now works as a blogger for AutoInsurance.US. With a background in finance writing, Peter is an expert on insurance, closely following regulation and industry news. 
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