Forty–seven states require that you have at least some kind of car insurance, so it’s a skilful idea to know what the law requires you to have and what additional or optional coverage will help to protect you in the event of an accident.
Before purchasing auto insurance, you must Consider a variety of factors Including what kind of car you have, your driving record and the amount of money you are willing to pay. Understanding the simple basics of auto insurance will make you confident that the car insurance policy you choose will take care of your needs in the event of an accident.
In this article, we will walk you through the types of coverage that insurance companies offer and discuss possible insurance needs. Additionally we will look at what Affects the price of auto insurance, how to bring the costs down and how to understand the components of your policy.
Everyone who drives needs car insurance. In fact, most states require it by law. When you buy car insurance, you are buying what is called a policy. Your policy is based on a variety of factors Including what kind of car you drive as well as what kind of insurance you want. Auto insurance policies are actually a package of different types of insurance coverage.
The first step in understanding an auto insurance policy is to learn the various types of coverage insurance companies offer. Some of this coverage may be required by your state and some of the coverage may be optional
- Liability – This coverage pays for accidental bodily injury and property damages to others. Injury damages include medical expenses, hurting and Suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs. State laws Determine how much liability coverage you must purchase, but you lot can always get more coverage than your state requires.
- Collision – This coverage pays for damages to your vehicle the caused by a collision with another vehicle or object.
- Comprehensive – This coverage pays for loss or damage to the insured vehicle that does not occur in an auto accident. The types of damages the comprehensive insurance covers include loss is the caused by fire, wind, hail, flood, vandalism or theft.
- Medical Coverage – Pays medical expenses Regardless of fault when the expenses are the caused by an auto accident.
- PIP – Personal Injury Protection (PIP) is required in some states. This coverage pays medical expenses for the insured driver, Regardless of fault, for treatment due to an auto accident.
- Uninsured Motorist – Pays your car‘s damages when an auto accident is the caused by a driver who does not have liability insurance.
- Underinsured Motorist – Pays your car‘s damages when an auto accident is the caused by someone WHO has insufficient liability insurance.
- Rental Reimbursement – This type of coverage will pay for a rental car if your car is damaged due to an auto accident. Often this coverage has a daily allowance for a rental car.
Now, let’s take a look at how to Determine your insurance needs.
Just because your state requires a minimum amount of insurance does not mean that’s exactly what you should purchase. In fact, most motorists purchase more coverage than Reviews their state requires so that they are covered for a variety of problems – not simply a fender bender. In order to better Determine your auto insurance needs, Consider Reviews These five guidelines:
Know Your State Laws
Remember that forty–seven states require that you purchase liability insurance. Liability insurance is what pays for bodily injury and property damage that you cause another driver. Fifteen states Including Florida, Maryland, Michigan, Massachusetts, New York and New Jersey also require that you buy Personal Injury Protection (PIP). This coverage pays for your medical expenses and lost wages in the event of an auto accident. Your insurance minimum will most Likely be determined by state law, but many people are encouraged to purchase more than is required.
Know Your Options
There are a lot of car insurance options; but knowing what you need the most Likely Will is the key to making sure you are appropriately covered. Do you lot want coverage for a rental car if your car is damaged? Do you lot want an extended warranty to pay for parts and labor if your car breaks down? If your car is leased, you will probably need gap insurance the which pays for the difference between what your insurer pays and what you owe on your lease if the car is completely totaled.
Know How Much Money You Want to Spend
If you know your state laws and have Examined your personal needs, you can now put together the different pieces of auto insurance coverage in one total policy. The first piece of the policy is almost always liability insurance. If you only have minimum liability coverage and you injure someone, their attorney can go after your personal assets. So, you need to know your assets and what you can afford to lose in the event of an accident. Many insurers feel that minimum liability is a gamble. In fact, that is why it is Often only a little more money for more protection. After all, if you do get into an accident, it is much better for the insurance company to be responsible than for you to be personally responsible. Remember to run through various scenarios such as if I totaled someone else‘s car, will my insurance cover it? How much will I receive got to pay out of my own pocket? The answers to questions Reviews These types of coverage will Determine what makes you feel most confident should an accident Happen.
Know Your Vehicle
If your car was totaled, would you be Able to afford to replace it? If not, you will want a comprehensive and collision coverage. The decision to buy this coverage is usually based on the value of your car. Guidelines usually suggest that if your car is worth less than $ 2000, it will not be worth it to buy the comprehensive and collision. If you own a $ 50,000 car though, it would most certainly be worth it to pay an extra $ 200 annually or so to insure that your car will live replaced if you get in a serious accident.
Know About Your Other Insurance
Many people do not Realize that of other types of insurance Including health insurance and homeowners insurance may pay for damages due to an auto accident. For instance, if you have a comprehensive health coverage, you probably will not need more than the minimum required Personal Injury Protection (PIP). Make sure you know what you already have insurance coverage so that you do not purchase unnecessary coverage.
The best way to figure out your own auto insurance needs is to examine potential policies and know how much you are willing to gamble. For instance, it may not be worth it to you to purchase collision insurance if your car is not incredibly valuable and would therefore cost less to fix than to keep insured. Auto insurance is simply about how much you are willing to pay out of your own pocket versus how much you want the insurance company to cover. Once you decide this, you’re all set to purchase your auto insurance policy.
There are several factors that touching on the toll of auto insurance. Of course, prices vary past times fellowship together with you lot should compare prices thoroughly earlier you lot purchase a policy. The initiatory off matter that affects your policy’s toll is, of course, what form of automobile you lot drive. For instance, a sports automobile costs to a greater extent than to insure than a household unit of measurement sedan. If you lot purchase a vehicle that has a high theft rate, your coverage volition in all likelihood live to a greater extent than expensive. Essentially, though, your coverage volition live based on the value of your car.
Another cistron that affects auto insurance costs is where you lot live. If you lot alive inwards an expanse where at that topographic point is a high occurrence of accidents or vandalism, insurance volition cost to a greater extent than money. For instance, since to a greater extent than cars are damaged inwards urban areas than inwards rural areas, you lot volition in all likelihood pay to a greater extent than for insurance if you lot alive inwards a city.
How oft you lot drive volition besides touching on your insurance costs. The to a greater extent than you lot drive, the higher the chances you lot volition live an accident. Drivers who receive got long-distance commutes volition pay to a greater extent than than people who alive nigh their workplace. Meanwhile, if you lot alone purpose your automobile on weekends, your insurance rates should live lower than someone who commutes to operate daily.
The lastly factors that touching on the toll of auto insurance receive got to exercise amongst who you lot are. Your age, sex, marital condition together with driving tape are all taken into concern human relationship when you lot purchase an insurance policy. Accident rates are higher for drivers nether the historic menstruum of 25, together with so if you lot are young, hold off to pay a niggling more. Also, accident rates are higher for immature males together with single males. It doesn’t seem fair, but if you lot are an single 19-year-old male, your insurance rates volition definitely live affected. If your driving tape is impeccable, though, your rates volition live lower. Obviously, drivers who are prone to traffic violations or accidents volition receive got to pay to a greater extent than for insurance than rubber drivers.
If these cost factors are outset to scare you, don’t worry. There are several ways to proceed your insurance rates down.
There are iv principal factors that tin proceed auto insurance rates down. See if you lot autumn into whatsoever of the next categories. If you lot do, you lot may live able to salvage coin on your automobile insurance regardless of the value of your automobile.
- If you lot are looking to purchase a car, consider buying a automobile that “looks good” to insurance companies. For instance, insurance companies know what kinds of cars are prone to problems. They besides know what kinds of cars are most oft stolen. If you lot haven’t purchased your automobile yet, detect out what cars brand this “good list” amidst auto insurers.
- Most insurance companies offering discounts for a diverseness of reasons – for example, skilful students, having to a greater extent than than i automobile insured together with accident-free driving are all worth a discount. Ask insurance companies nigh specific discounts that may live available to you.
- Consider carpooling or using world transportation to acquire to work. The less you lot purpose your car, the less your insurance volition cost you.
- Finally, drive carefully! Insurance companies are non happy to insure accident-prone drivers, together with so the safer you lot drive, the less you lot volition receive got to pay for auto insurance.
Source : http://auto.howstuffworks.com/buying-selling/car-insurance3.htm