Accounting for Car Insurance in Your Budget
Accounting for Car Insurance in Your Budget
Purchasing insurance is an often-overlooked aspect of a married couple’s budget and getting it wrong can set you up for a world of hurt. It can be tempting to go with the lowest cost insurance and not consider the coverage, but this may not always be the best decision in the long run. Often the lowest coverage means coverage that contains only the state limits for liability, which may not cover your vehicle in the event of an accident. Vehicles these days are so sophisticated that even a small, fender bender could result in thousands of dollars in damage.
Because of this, it is important to not only do your research when choosing insurance, but also to make sure to meet with your agent annually to discuss any life-changing events. This will ensure the amount of coverage you have grows with you and your family.
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Mission Response:
Great pic with your new vehicle! Adrian is right, it is very important to factor in the cost of insurance when shopping for a car because the total cost of your vehicle includes much more than just the car payment. Insurance is about risk management with the purpose to protect you against financial loss. With military life and many moves, it’s important to always check costs before a PCS. Be sure to factor in any changes in insurance coverage to your spending plan so you’re not surprised upon arrival at your new duty station. There are many types of insurance to consider: homeowners, renters, life, health and auto. For auto insurance, keep in mind it’s just one part of your overall vehicle expense. Don’t forget to include it with other transportation-related expenses in your spending plan. Financial experts recommend keeping transportation expenses – including car payment, insurance, fuel and maintenance – to less than 15% — 20% of your pretax income. Visit Money Ready 201: Insure Your Family for an overview on how insurance works and why it is an important part of your financial plan.
