Key Auto Insurance Points to Know When Buying a Car

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Transcription
 
Slide 1:

Hello! I’m Dan Lyles with Lyles Insurance. In this video, were going to go over the key to auto insurance points that you need to know when buying a car.

Slide 2:

Many people when they buy a vehicle, they don’t consider the insurance part of it until later on after it’s too late. They don’t consider coverage levels or the cost that it’s going to be. And as a result, they either end up with lousy coverage, or they have a vehicle that they can’t afford. There are some key points that you need to know about buying a car as to how it affects your auto insurance. And this video is going to go over those points.

Slide 3:

Before we get into things, I want to go over a couple misleading terms that leads to a lot of confusion. The term “Full Coverage”, I am not a fan of because it confuses people. “Full Coverage” does not necessarily mean that you have the best coverage you can have. It simply means that you have both comprehensive and collision coverage. Now let’s go over each one of them real quickly. And I’m going to go over them backwards because it’s easier to learn that way. Collision coverage: that covers physical damage done to your vehicle if you’re in an accident. Comprehensive coverage: covers physical damage done to your vehicle for anything other than an accident (Such as theft, fire, vandalism, weather damage, hitting a deer, things like that). “Comprehensive” is another misleading term I don’t like because it again, is confusing the people. It does not mean all inclusive and that it covers everything. Some states even call it “Other than collision” coverage, which I believe is a lot more accurate.

Slide 4:

There are five basic parts to an auto insurance policy. And we just covered the last two parts, comprehensive and collision coverage on the last slide. The other three parts to an auto insurance policy are liability coverage, which is required in all states. It pays “the other guy” if you cause an accident which results in the other guy having injuries or property damage. Uninsured or underinsured motorist coverage. This pays if you get hit by someone else not carrying auto insurance or they have insurance but they don’t have enough to cover all of your injuries or property damage. That’s where uninsured or underinsured motorist coverage kicks in. And finally, medical payments. This pays for injuries to you or your passengers if you get hurt in an accident. One thing to keep in mind about these three, they do not have anything to do with full coverage. Like I said on the last screen, full coverage only refers to comprehensive and collision coverage.

Slide 5:

I quickly want to go over deductibles because it is important that you understand how they work. Deductibles apply only to comprehensive and collision coverage. They’re your out of pocket expense if you were ever to file a physical damage claim on your vehicle. For example, let’s say you had an accident that caused $2000 worth of damage. If you have a $500 deductible, your insurance policy would pay out $1500 ($2000 of damage minus the $500 deductible). And likewise, if you have a $1000 deductible with $2000 in damage, that would pay out $1000.

Slide 6:

Whether you buy your vehicle in full or finance it through a car loan makes a difference with auto insurance. Of course, if you pay for it in full, you’re free to choose whatever coverages you like. But if you finance it through a bank, finance company, or buy here pay here, they’re going to require that you carry comprehensive and collision coverage on that vehicle until you pay your loan off. They will also want to be added as a Lienholder to your policy. And here’s an important part to understand, some banks will let you to go as high as $1000 deductibles on both comprehensive and collision coverage. But there are others which will not allow you to go any higher than $500 deductible. So if you want to go with $1000 deductibles to save some money, make sure it’s ok through your finance company. Make sure they’re cool with that because if not, you’re going to have to go back and redo your policy.

Slide 7:

This is for people who are buying brand-new cars or cars that are nearly brand-new. Your auto insurance company should offer you either GAP insurance coverage, or insure the vehicle with what’s known as Total Loss Coverage. Both of them are similar. They apply if you were to total your vehicle. They will pay up to a certain percentage higher than what your vehicle is worth. And this is really important because it helps prevent you from going underwater on a car loan. And by underwater, that simply means that your vehicle is not worth as much as you owe on the car. Either coverage, GAP or Total Loss Coverage is very inexpensive. And I highly recommend you take it out if your vehicle is new enough to qualify.

Slide 8:

And finally, this is very important. Make sure you get an auto insurance quote before you buy your vehicle. Don’t make the mistake of buying a vehicle without knowing what the price on insurance is going to be. Some people do that and they end up having a higher insurance premium than what their car payments are. And they find out that they’ve bought a car that they really can’t afford. And this is especially true with young drivers and/or people with bad driving records. It only takes a few minutes to get an auto insurance quote. So make sure you know what you’re getting into before you buy the vehicle.

Slide 9:

For those of you who live in Ohio, Indiana, Michigan, Pennsylvania, Virginia or West Virginia, if you would like for me to personally run you a quote, I’ll be very happy to do so. I’ve posted a page from my website where you can get an online quote, and I’ll get back to you with prices. Or if you would just rather get a quote over the phone, I’ve also posted my phone number. Thank you for watching and have a great day!