Today, car insurance is one of the most essential things in our life, especially if we have a car. No matter how luxurious our car is, we will always need proper coverage. During the time, the way people buy auto insurance has changed. Many years ago, buying an auto insurance could be done easily from our neighborhood agent. Today, there are a lot of options we can choose to buy car insurance. Moreover, we also have some new coverage options.
Today’s car insurance comes with various types of policy. Because of that reason, we have to consider what kind of policy we want. Basically, there are three types of insurance policies, which are traditional, per-mile and usage-based:
- Traditional car insurance
In this policy, the insurers will consider various personal factors to determine the insurance quotes for the policy, including our age, gender, driving history, credit score and many more. If the factors show that we are high-risk driver, then we would get higher insurance rates than the low risk. Here, we can choose for a minimum coverage amount from a long list of different types of coverage or per state law.
- Usage-based car insurance
In this type of policy, the insurers presume our driving skills based on a list of risk factors, including our accident history. If we buy this policy, we will have a telematics device to plug in our car. The device records our driving behavior. If the records show that we are a low-risk driver, we will get lower rates.
- Per-mile car insurance
Similar to the usage-based, this car insurance also use a telematics device. However, the device works on one condition, which is counting how much we use the car. To determine how much we have to pay, this car insurance uses the same factors as traditional car insurance. However, we can save some money through the device. Basically, if we do not use the car much, the premium may be cut significantly.