So You’re About to Buy Your First Auto Insurance Policy…

first auto insurance policy brandon, riverview florida

Congratulations! Becoming an independent adult can be both exciting and scary. Finding your first job and apartment are milestones to be proud of. Buying your first auto insurance policy? That can be a milestone, too, as it’s one more step in taking responsibility for your life and future financial well-being.

Here are some basics to consider as you shop for your first auto insurance policy:

Why carry auto insurance?

Simply put, you must carry auto insurance to drive legally. But insurance is really intended to protect you financially, not just make you “legal.” Think about it: if you’re in an accident, proper insurance coverage pays for injuries, as well as having your vehicle repaired—things that can cost multiple thousands of dollars. You’d never be able to afford this without insurance coverage.

What auto insurance coverages should you carry?

To tag your car, Florida law only requires that you carry a minimum of $10,000 Personal Injury Protection (PIP) and $10,000 Property Damage Liability (PD). If you make car payments, your lender will most likely require that you carry comprehensive and collision. However, unless you absolutely cannot afford it, it makes much better financial sense to add Bodily Injury Liability (BI) to your policy. If you are at fault in an accident, BI will help pay for the victims’ injuries, up to the policy limits. This also allows you to comply with the Florida Financial Responsibility Law, which states that anyone responsible for a crash with injuries must be carrying bodily injury liability limits of at least $10,000 per person, $20,000 per accident, in addition to $10,000 each of PIP and PD. If you don’t have this coverage, you may be required to carry an SR-22 for three years.

The increase in premium for adding BI coverage is far less than what it would cost you if you were sued following an accident (and statistically speaking, young drivers are more likely to be in an accident).

Click here for a basic explanation of types of auto insurance coverage.

How can you afford auto insurance?

There are a few ways you keep your auto insurance premiums down. The most obvious is to drive safely and keep your record clean!

A second important thing you can do is protect your credit. Credit scores have become a major factor in quoting auto insurance rates. The better your credit, the better the price of your auto insurance.

If you have been on your parents’ insurance policy, you may be eligible for a discount for having continuous coverage, so let your agent know if this is the case. (Make sure you don’t let your insurance lapse once you buy it, too.)

Ask your agent about any additional discounts available, such as for safety features like airbags or anti-lock brakes.

And finally, shop around to find the best rate. Just be sure when you’re comparing policies that each agent is quoting you the same coverage and limits.

Providing affordable insurance is where an independent agency like L & M Insurance Group really shines. We represent more than 15 different quality auto insurance companies, including Progressive, Safeco, Nationwide, Metropolitan, Travelers, Mercury, GMAC, Foremost—and more. Please call us at 813-672-4100 for a free quote today! We’d love to serve you.

L & M Insurance Group is an Independent Insurance Agency based in Riverview, Florida. We can shop, compare and recommend the home, auto, commercial or life insurance policy that’s best suited for you, your family or your business. Call 813-672-4100 or visit landminsurancegroup.com for more information.

Should You Drop Comp and Collision on Your Older Vehicle?

While we generally don’t recommend dropping insurance coverage, there may be an instance where it makes financial sense: If you have an older vehicle and do not make payments on it, you may want to consider reducing or dropping your comprehensive and collision coverage.

First, a quick reminder of what comprehensive and collision coverages are: Comprehensive pays for things that happen to your insured vehicle other than damages from a collision—a fire, theft, vandalism, or a tree limb falling on it, for example. Collision pays for loss or damages to your insured vehicle due to a collision.

If you are considering dropping your comp/collision, here are some factors to consider:

Save on Auto Insurance Brandon Florida

The value of your vehicle. If your vehicle were a total loss, what would your insurance company pay you? It’s easy to find out the actual cash value (ACV) of your car by using an online tool such as Kelley Blue Book’s “Check My Car’s Value” feature. Remember that the value of your vehicle is lower if is in poor condition (dings, dents, high mileage, worn interior, etc.)

How much you pay for comprehensive and collision. Check your declarations page to find out what portion of your premium comes from comp/collision coverage. One guideline to bear in mind is that if the value of the vehicle is less than 10 times the annual premium, you might consider dropping comp/collision coverage. Example: your car is worth $2,500 and you pay $300 year for coverage.

Your deductible. Common options range from $250-$1,000. If your vehicle is totaled, your insurance company will pay you the value of your vehicle less your deductible. Also factor in what you’ve paid in premium for the year. In an older vehicle, it’s possible for your premium and your deductible to equal more than the value of your car.

Even if your vehicle is older and not worth that much, there are some circumstances in which you may still want to carry comp/collision, including:

  • You have teen drivers in the household. (Teens are more likely to be in an accident.)
  • You’d have a hard time coming up with enough money to replace your car if it was a total loss. (Even a small payout from your insurance company would help with replacing your vehicle.)
  • You live in a hurricane or flood prone area. (In Florida, most of us do!)
  • You live or work in an area known for high theft.

We understand economic reality forces all of us to look for ways to save money on auto insurance. At L&M Insurance Group, we do our best to offer a wide variety of cost-effective options, and we’ll gladly discuss with you what coverage you need. Please contact us if you have any questions about your auto insurance policy, or you’d like to get a free quote.

L & M Insurance Group is an Independent Insurance Agency based in Riverview, Florida. We can shop, compare and recommend the home, auto, commercial or life insurance policy that’s best suited for you, your family or your business. Call 813-672-4100 or visit landminsurancegroup.com for more information.