Anyone who owns an operating motor vehicle has to carry auto insurance in Massachusetts and most other states. That’s a fact that you already know. However, not every auto insurance policy provides equal coverage. That’s why it makes sense to do some research and compare policies at least on an annual basis. Additionally, there are 5 things you should know about auto insurance in general Car Insurance.
Never Let Your Policy Lapse
It can be tempting to try to save a few dollars by cancelling your policy and going without coverage for a little while. But the problem is that going without coverage even for just a day can have serious consequences. For one, you won’t be covered if you cause an accident. Two, if you’re in a car accident through no fault of your own, you can still get in trouble.
Depending on the county you live in, you may also face stiff penalties for letting your coverage lapse. Most auto insurance companies communicate with the Department of Motor Vehicles. If you cancel your coverage, they’ll know about it and can take appropriate measures.
Insure Every Car Right Away
Some states require an existing auto insurance policy to cover any new vehicles for a certain amount of time, which means you don’t technically have to insure the new car before you drive it off the lot. However, it’s always better to be safe than sorry. Before you take your new car home, you should call the auto insurance company and add the new vehicle to your existing policy.
Getting into an accident with a new car is probably one of the most annoying things that can happen to you. But how much worse would it be if the new car wasn’t covered by insurance?
Consider Purchasing GAP Insurance
While it’s easy to purchase both new and used cars, it’s difficult to purchase a car that is worth as much as you paid for it. If you have to get a car loan, then you’ll probably be upside down at least for the first little while. The bad news is that your car insurance only covers the current value of the car but not the amount of your loan.
In order to avoid financial ruin after a car accident, you can purchase GAP insurance to make up for the difference. The great thing about GAP insurance is that you can usually add the price of it into your car loan when you buy it.
Get a Refund for GAP
Most people know about GAP insurance, but few people realize that they can actually get a refund for it. GAP insurance makes sense for the first year or two after buying a new car. But as soon as the amount of your car loan is equal to or less than the value of your car, you can cancel your GAP insurance and ask for a refund.
The information about your GAP insurance can be found with the rest of your paperwork from when you purchased the car. If GAP insurance was purchased with your loan, then the refund might be applied to your loan balance instead of given to you directly.
Policy Premiums Change Often
You should probably compare prices for auto insurance in Massachusetts and other states at least once a year. Insurance prices change often because they’re based on the current statistics in your area. This is why one insurer might have better prices in your state than another. You can also adjust the cost of your monthly premium by tweaking your coverage. However, it’s important to make sure that you don’t underestimate your insurance needs just to save a few bucks a month.