Buying a car is a big financial decision that involves protect for yourself and your vehicle. If you are purchasing a new vehicle or simply shopping for a car insurance policy, you need to understand what your options are.
Essentially, an auto insurance policy is meant to give you sufficient protection if an accident happens. If you have been basing your choice of auto insurance on low premiums, you need to check out more insurance products and their benefits. Below are some types of auto insurance coverages you should be evaluating.
Liability Coverage
Auto liability coverage is the most basic policy and is mandatory in most states. Should you opt for this coverage, it means that if you get involved in an accident where you are held responsible for damage or injuries, the policy will take care of the other person’s medical bills and property repair. Liability coverage only covers the other person’s needs under these two types:
- Bodily injury insurance. If you cause an accident and injure someone, this coverage takes care of the medical bills within your limit so that you do not have to pay from your pocket.
- Property damage insurance. If you cause an accident and damage someone else’s vehicle or property, this is the coverage that pays for repairs. However, it will only cover the repairs within the limit you have set.
If the medical bills or repair costs exceed your limits, you may be liable to pay the excess damages from your pocket. Therefore, you should give careful consideration when deciding the limits of liability. Also, this coverage does not pay for your medical bills or car repairs. As such, you may need an additional cover that takes care of your bills and repairs in case you are at fault.
Comprehensive Coverage
Comprehensive coverage, also known as “Other than Collision”, protects your vehicle for damages like theft, vandalism, fire, and natural disasters. While not required by the law to carry, many loans on vehicles will require this coverage. If not required, you should still consider purchasing to protect the investment you already have in the vehicle
Collision Coverage
A collision cover pays for damages to your car if you are involved in any type of collision with your vehicle. Like the comprehensive coverage, it is not required by law, but most loans will require you to carry in order to satisfy loan conditions.
Medical Payments Coverage
Medical payment coverage can take care of medical bills if a person is injured when driving in an insured vehicle. The cover may pay for costs of surgeries, X-rays, hospital visits, and other related expenses. In this case, you are eligible for coverage regardless of whether you are responsible for the accident or not. This coverage will have a set limit to choose from.
Personal Injury Protection Coverage
Personal injury protection cover (PIP) is related to medical payments insurance, only that under this cover, the policyholder enjoys more benefits. PIP covers medical bills for the injured persons and associated expenses like time spent away from work as needed to recover.
Uninsured/ Underinsured Motorist Coverage
Although the law requires every motorist to be insured, you may find some driving around without auto insurance coverage. If you get an accident involving such a motorist, this cover will protect you. Some states also cover their policyholders against damage caused by hit-and-runs. This coverage can protect not only your vehicle, but also bodily injury sustained.
Tips for Finding a Suitable Auto Insurance Coverage
If you have already chosen the auto insurance to buy, you may be wondering where to start. Sifting through the many companies and coverages in the market can be overwhelming. These five tips will help you understand the essentials when searching for a proper coverage for you.
Evaluate Your Requirements
Understanding your requirements is the initial step toward finding the right insurance plan and company. To be safe, focus more on the coverage type rather than the monthly premiums. Determine the right insurance policy and any additional covers you need. Your needs should direct you as you search for the right policy.
Do a Background Check on Your Potential Insurer
If you have friends who are proud of their insurance firms, you can check them out to see whether they would be a good fit for you. But do not settle for them without exercising due diligence. Assess their claim data history to understand how they handle their clients. Although most genuine cases are approved, it is important to understand the insurer’s swiftness in facilitating the process.
Compare Several Companies
Even if you get referrals, comparing rates with multiple companies helps you make an informed decision. Apart from comparing their rates, look up their information on your state’s Department of Insurance. This is where an independent agency can help you compare multiple companies.
Set the Right Deductible
Determining the right auto insurance deductible is not as easy it may sound. If you opt for a low deductible, you will be paying higher premiums. But, to avoid spending more in case of an accident, you should have a higher deductible. You can consult an insurance expert to help you set the right premiums and deductibles, especially if you have a clean driving record.
Online Auto Insurance Quotes
While this may be an easy and fast way of getting quote comparisons, many online quotes just give you the optimal premium without getting accurate rates. In order to find the proper coverage with the best rates, talk to an agent that can explain what coverages do, assess risks and run reports to give you the most accurate rates.
Your agent should be an advisor to help you secure the best coverages and rates suited for your needs.
