How To Buy Car Insurance
if your car is stolen, vandalized, in an accident, or involved in any other situation in which it sustains major damage, you'll be glad you have car insurance to cover you. Of course, in most cases, you really don't have a choice. The vast majority of states mandate carrying some form of auto insurance.
When you're learning how to buy car insurance, it’s useful to understand the different types of coverage and how they can pertain to your particular situation.
Most car insurance policies include the following elements.
Liability Coverage - Insures you against harm you may have caused other people. This can include property damage as well as bodily injury.
Medical Coverage - Insures you against any personal medical expenses resulting from an accident.
Personal Injury Protection - Covers you if you cause injury to another person.
Comprehensive Coverage - Protects your vehicle and the property of others against loss.
Collision Coverage - Ensures your car and any other vehicles involved in a collision are covered in the event you are found to be at fault for an accident.
Uninsured Motorist Coverage - Repairs your car if it is involved in accident with someone who doesn’t have insurance coverage.
Underinsured Motorist Property Damage - Pays your repair costs in the event the liability insurance coverage of the negligent driver is not enough to satisfy all obligations.
Rental Reimbursement Coverage - Provides a daily allowance for a rental car while your car is being repaired as a result of accident damage.
Most of these elements of a policy allow you to vary the dollar amount of protection you'll have. You can also choose to omit some of them.
The more risk you assume, the less your insurance will cost. However, if your insurance won’t fully cover the costs of an incident, and you don’t have the cash to make up the difference, you could wind up in a lot of trouble.
Other factors to consider are your driving record, your age, your sex, where you live, the number of miles you drive annually, and how many cars you insure. Your rate will increase in direct proportion to your annual mileage and the number of cars covered. On the other hand, the cleaner your driving record, the lower your rate. Older drivers typically pay less (unless they have poor driving records), and females usually pay less than males (again, depending upon their driving records). Teens generally cost the most of all. However, good grades and driver training can translate into teen driver discounts. Your Zip Code also makes a difference. If you reside in a low crime area, car insurance is generally more affordable.
Another determining factor is the amount of the deductible you choose to assume. In a nutshell, the deductible is the amount you are willing to pay against a claim before your insurance coverage kicks in. The lower the deductible you choose, the higher the premium you’ll pay, The higher the deductible you choose to accept, the more you'll pay out of pocket in a claim, but your policy will be cheaper to maintain.
The insurance company you choose can also make a difference. Rates vary considerably among them. This is why it is important to make comparisons, taking care to be sure you’re looking at comparable coverage with each quote.
Buying insurance online, or through an agency, can help you find lower rates because you can get quotes from several different policymakers at the same time. However, this should be balanced against the solvency of the company you have in mind. When dealing with unfamiliar insurance companies, always investigate them with the Better Business Bureau as well as your state’s Insurance Commissioner’s office, to make sure they’ll be around if you file a claim.
Long story short, understanding how to buy auto insurance can save you money. But, like any other financial transaction, doing your homework first is very important.