5 Car Insurance Tips to Help You Buy Smarter

Buying auto insurance doesn’t have to be intimidating. There are many options to help you tailor your policy to your needs – and your budget. Armed with some basic information, you can make smarter insurance decisions. These car insurance tips can help you narrow your choices and save time and money.

1. Make sure you’re legally covered

Car insurance requirements vary from state to state, but one thing is the same virtually everywhere in the U.S. – if you drive a car, you’re required to have some form of car insurance or proof of financial responsibility. Several factors, including your driving record and insurance history, may affect your policy rates. Start here to find the minimum requirements for your state.

2. Understand your insurance options

Insurance can seem complicated with so many choices available to protect you and your car. Nationwide offers easy-to-read descriptions of various insurance coverages so you can understand the basics, such as the difference between collision and comprehensive, before you call an agent or get a quote online.

3. Get at least three quotes

Compare price and service options by getting quotes from at least three insurance companies. Make sure you request the same coverage from each to get an apples-to-apples comparison. Rates may vary from one company to another, and the lowest priced insurance may not give you all the coverage you need. Look at price, amount of coverage, benefits and claims services before you make your decision.

4. Take advantage of discounts

You might be surprised by the number of discounts available to lower your for auto insurance rates. For example, if you insure multiple vehicles with Nationwide or stay with us for at least five years, you may receive substantial savings. Be sure to ask about these and other auto insurance discounts when you shop for a policy.

5. Look for extra help when you need it

Nationwide offers extra products and services for purchase to give the drivers in your family even more protection.

  • Accident Forgiveness –With this optional coverage, Nationwide will not raise your auto insurance rates following your first at-fault automobile accident.
  • Roadside Assistance – Nationwide Roadside Assistance coverage is available in two different levels, Basic and Plus, so you can choose the one that works best with your budget. Get covered for fuel delivery, lockout service, jump-starts and more.
  • Loss of use – If you can’t drive your car due to a covered loss, this coverage helps pay for a rental car or other transportation expenses so you can get back on the road.

Make Sure You Know the Auto Insurance Laws in Your State

Car insurance laws vary from state to state, but all states have requirements that include some type of car insurance or proof of financial responsibility. Even though it may seem like an extra cost, car insurance protects you, your family and your vehicle if you’re in an accident or if your vehicle is damaged.

Several factors, including your driving record and insurance history, affect the type of insurance policy available to you. If you have a clean driving record and have been insured in the past, you’ll most likely qualify for standard auto insurance coverage. If you’ve had a lapse in insurance coverage or a less-than-perfect driving record, you can generally still qualify for auto insurance. This type of insurance is known as nonstandard auto insurance.

State insurance laws may require some level of these auto coverages

Bodily injury liability

Liability Insurance applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy may also be covered when driving someone else’s car with their permission.

Medical payments or personal injury protection (PIP)

State insurance laws typically require medical coverage that pays for the treatment of injuries to the driver and passengers of the policyholder’s car. PIP may cover medical payments, lost wages, the cost of replacing services normally performed by someone injured in an auto accident and funeral costs.

Property damage liability

This auto insurance coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. In addition to vehicle damage, it can include damage to lamp posts, telephone poles, fences, buildings or other structures your car hits.

Collision coverage

You may be covered by collision insurance in the event that your car is damaged by a collision with another vehicle or object, or in the event the vehicle flips over. Collision insurance may also cover damage caused by potholes.

Comprehensive coverage

A comprehensive insurance policy may reimburse you for loss due to theft or damage caused by something other than a collision, such as fire, falling objects, earthquakes, windstorms, hail, floods, vandalism or contact with animals.

States do not require that you purchase collision or comprehensive coverage; however, if you have a car loan, your lender may insist you carry it until your loan is paid off.

Uninsured and underinsured motorist coverage

This coverage may reimburse you, a member of your family or a designated driver for damages incurred if one of you is hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage comes into play when an at-fault driver doesn’t have enough insurance to pay for your total loss. This coverage may also protect you if you’re hit as a pedestrian.

Understanding Your Insurance Policy

Let’s face it, reading an insurance policy is not like curling up with a good book. It’s a fairly complex document that tries to explain all the things you’re covered for, and all the things that are excluded when a loss occurs.

Although insurance companies now provide insurance policy information that is easier to understand, you still need to review the document carefully. Here are some general guidelines that can help explain how to read an insurance policy.

The common parts of an insurance policy include:

Policy declarations

The policy declarations page is basically the first page of the policy package. The page states who is insured and the time period the policy provides coverage. It also gives the primary general information, such as a description of what’s insured, the coverages and primary coverage limits.

Insurance definitions

This section gives you the definitions of words and phrases you’ll see in the policy. For example: “Motor vehicle” and “Deductible” are two terms often found in an auto policy. Words with definitions may appear in bold print throughout the policy. That helps you know what to look up if you don’t know them already. You can also browse Nationwide’s insurance glossary to get the answers you’re looking for.

Policy coverages

This section describes the specific insurance provided by listing what property is covered and for what perils. For example, a boat owner’s policy may cover direct physical loss or damage to the boat and motor, portable equipment and other specified property. It can also provide liability coverage.

Policy exclusions

Policy exclusions describe what coverage limits exist or how coverage may be eliminated depending on how a loss occurs. Insurers may allow policyholders to buy back coverage for some exclusions for additional premium. For example, earthquake coverage may be excluded for people who live in an area where earthquakes are unlikely to happen. However, if a customer would feel more comfortable with the coverage, they could buy it back.

Limits and special limits

This section explains how much the insurer pays for particular losses or types of property. So, while something is covered, it may be covered for a specific dollar amount or for a limited percentage of the entire loss.

Insurance conditions

This section tells you what the insurer’s responsibilities are, and what your responsibilities are as the customer. This includes how to cancel a policy, subrogation and payments plans.

Duties after a loss

This area gives guidance on what to do when a loss occurs. It includes notifying your insurer as soon as practical, notifying the police, if appropriate, and protecting your property from further damage.

Insurance endorsement

This area defines optional coverages available for additional premium. An insurance endorsement may change your policy to help better fit the policy to meet your needs. Amendatory endorsements may also be added by the insurance company to clarify policy terms and language.

Make Sure Your Home is Covered for All It’s Worth

A home is the largest investment most people make in their lifetime. About two out of every three homes in America are underinsured. The average underinsurance amount is about 22%, though some homes are underinsured by 60% or more. This means millions of American homeowners are at risk of major financial loss should a disaster ever affect their home. Homeowners in these unfortunate situations find themselves responsible for tens of thousands of dollars of unexpected out-of-pocket costs to rebuild their house. Many of these homeowners are financially unable to rebuild a house like the one they had prior to their loss.

What is reconstruction cost?

Reconstruction cost is what it would cost to rebuild your house from the foundation up with materials of similar kind and quality.

Is reconstruction cost the same thing as market value?

No. Reconstruction costs for your home may differ considerably from market value, particularly for older homes. Market value is what a willing buyer would pay for your home, including the lot. Location is a major factor in determining market value. Homeowners should also not assume that coverage matching their mortgage balance is sufficient to rebuild their home. The amount of insurance you buy should be based on rebuilding costs, not the selling or purchase price of your house.

What are some factors that affect reconstruction costs?

  • Access to your home site is limited because of trees, lawns, other homes and fences. Sometimes building code changes that occur after the initial build.
  • Inflation is generally greater for building materials than other commodities. Older homes may need unusual materials that may be expensive to locate or duplicate.
  • In a partial reconstruction, there is also extra cost in matching and aligning the undamaged part of the structure with the reconstructed part of the structure.
  • In partial loss situations, removing the undamaged contents to put elsewhere for safekeeping.
  • New home builders schedule their work for a building season and work most efficiently in a factory-line approach, which saves on both labor and material costs. Your reconstruction would be a custom job for them.
  • There are more new build contractors than reconstruction contractors. With an easier task of building a home and a greater supply of those doing it, new build contractors charge significantly less for a job than a reconstruction contractor does.
  • If the damage to the home is as a result of a catastrophe or at the same time as a catastrophe, demand surge pushes the price higher for labor and materials for all construction.
  • Extra costs to tear out damaged materials or demolition and debris removal.
  • Repairing a partially damaged home often means working from the top down, while new construction is usually from the ground up.

Make sure your home improvements are protected

Remember when you updated your master bath? Or maybe added on a new deck? And, don’t forget the kitchen remodel. Millions of Americans have taken advantage of near-record low interest rates and mortgage refinancing in recent years to upgrade their homes. According to one study, nearly 40% of those who have significantly remodeled their home have not updated their homeowners insurance or weren’t sure if they had done so.

Let your agent know if you have remodeled or even made improvements to your home so your home is better protected. It’s a good idea to contact your agent before or shortly after a renovation begins, rather than waiting until the work is complete.

Cover your personal possessions, too

Most policies only cover the current value of personal possessions, such as clothing, furniture and appliances. For example, the current value of a 5-year old TV is less than its original purchase price. The current value will not be enough to cover the cost to replace items with new ones. You should consider buying optional replacement cost coverage for your personal belongings, then your damaged or stolen possessions can be replaced with new. After all, wouldn’t you rather replace that 5-year old TV damaged by lightning with a brand new TV?

Asegúrate de Que en Tu Hogar Esté Cubierto Todo lo Que Te Importa

Una casa es la inversión más grande que la mayoría de las personas hace en su vida. Dos de cada tres hogares en los EE. UU. tienen seguro insuficiente. La cantidad promedio de seguros insuficientes es de un 22%, aunque algunos hogares tienen un 60% o más. Esto significa que millones de propietarios de viviendas en los EE. UU. tienen riesgo de pérdidas económicas importantes si un desastre afectara su hogar. Los propietarios de viviendas que están en estas situaciones desafortunadas deben afrontar decenas de miles de dólares en gastos inesperados para reconstruir sus casas. Muchos de estos propietarios de viviendas no pueden, por cuestiones económicas, volver a construir una casa como la que tenían antes de su pérdida.

¿Qué es el costo de reconstrucción?

El costo de reconstrucción es lo que costaría reconstruir tu casa desde los cimientos con materiales de una clase y una calidad similares.

El costo de reconstrucción ¿es lo mismo que el valor de mercado?

No. Los costos de reconstrucción de tu hogar pueden diferir mucho con respecto al valor de mercado, en particular, para las casas antiguas. El valor de mercado es lo que un comprador pagaría por tu casa, incluido el lote. La ubicación es un factor importante al determinar el valor de mercado. Los propietarios de viviendas no deberían asumir que una cobertura similar al saldo de su hipoteca es suficiente para reconstruir su hogar. El monto del seguro que compras debería estar basado en los costos de reconstrucción, no en el precio de venta o de compra de tu casa.

¿Cuáles son algunos de los factores que afectan los costos de reconstrucción?

  • El acceso a tu vivienda está limitado por árboles, parques, otras casas y cercos. A veces, cambios en el código de construcción que se realizan después del inicio de la construcción.
  • La inflación suele ser mayor para los materiales de construcción que para otros productos. Las casas antiguas necesitan materiales poco comunes, cuya ubicación o imitación puede ser costosa.
  • En una reconstrucción parcial, también hay un costo extra por hacer coincidir y alinear la parte no dañada con la parte reconstruida de la estructura.
  • En casos de pérdida parcial, la extracción de contenidos no dañados para ponerlos en otro lugar y protegerlos.
  • Los nuevos constructores de casas programan su trabajo para una temporada de construcción y trabajan de una manera más eficiente con un enfoque tipo línea de producción, el cual ahorra costos de mano de obra y de materiales. Tu reconstrucción sería un trabajo personalizado para ellos.
  • Hay más contratistas de construcciones nuevas que contratistas de reconstrucción. Con una tarea más sencilla al construir una casa y una mayor cantidad de mano de obra, los contratistas de construcciones nuevas cobran mucho menos por un trabajo que un contratista de reconstrucción.
  • Si el daño a la casa es ocasionado por una catástrofe, o al mismo tiempo que una catástrofe, el aumento en la demanda hace que suba el precio de mano de obra y materiales para toda la construcción.
  • Costos extra por quitar materiales dañados o por retirar materiales de demolición y escombros.
  • Reparar una casa parcialmente dañada suele implicar un trabajo de arriba hacia abajo, mientras que una construcción nueva suele ser desde el suelo hacia arriba.

Asegúrate de proteger las mejoras de tu vivienda

¿Recuerdas cuando modificaste tu baño principal? ¿O tal vez agregaste una nueva terraza? Y no olvides la remodelación de la cocina. En los últimos años, millones de estadounidenses han aprovechado las tarifas de bajo interés y la refinanciación de hipotecas para modernizar sus casas. Según un estudio, casi el 40% de quienes hicieron una remodelación importante en sus casas no actualizaron su seguro de vivienda o no estaban seguros de haberlo hecho.

Para estar mejor protegido, informa a tu agente si remodelaste o si realizaste mejoras en tu casa. Lo mejor es comunicarte con tu agente antes o poco después de haber comenzado una renovación en vez de esperar a que la obra esté completa.

Cubre tus pertenencias personales también

La mayoría de las pólizas sólo cubren el valor actual de las pertenencias personales, como ropa, muebles y electrodomésticos. Por ejemplo, el valor actual de un televisor de 5 años es menor que su precio de compra original. El valor actual no será suficiente para cubrir el costo de reposición de artículos nuevos. Deberías considerar comprar una cobertura opcional de costo de reposición para tus pertenencias personales, de manera que tus pertenencias dañadas o robadas se puedan reemplazar por unas nuevas. Después de todo, ¿no preferirías reemplazar ese televisor de 5 años dañado por un rayo por un televisor nuevo?