Understanding Auto Insurance

Sometimes it can be difficult to pick the right auto insurance for you. There are some things to consider before you even decide to choose an auto insurance company. First, you need to understand how auto insurance works. You’ve heard about different deals with deductibles and premiums, but what does this mean? We’re here to help you figure out the basics.

When purchasing a car insurance policy, many different things may or may not be covered. These include:

• Liability – covers accidental bodily injury or property damage you inflict on others.
• Collision – pays for the damage to your vehicle if it is in an accident with another car or object.
• Comprehensive – which covers loss r damage that did not occur in an accident but by other causes, such as fire, wind, hail, flood, vandalism, or theft.
• Medical Coverage – pays medical expenses you might incur because of an auto accident.
• PIP, or Personal Injury Protection – pays medical expenses for the insured driver regardless of auto accident fault.
• Uninsured Motorist – covers your expenses if someone without insurance causes an accident.
• Underinsured Motorist – pays damages if the driver who caused the accident doesn’t have sufficient liability insurance.
• Rental Reimbursement – to cover your costs if you have to rent a car while your vehicle is being serviced for damages.

Most auto insurance policies will combine some form of the above types of coverage to offer a more comprehensive approach. You need to check the laws for your state and ensure that the policies you are interested in meet the minimum requirements of auto insurance. A plan with more coverage might be your best bet because you do not want to incur higher bills if you are in an auto accident and the coverage you choose is not extensive enough to cover the accident.

Once you have done research on your state laws as well as the plans available and what they cover, you need to consider your car (after all, if you drive something worth a lot over an older “junker” car, it may be worth paying the extra few hundred dollars a year to get comprehensive insurance) and also your other insurance policies – some people do not realize that their health insurance or homeowners insurance might cover some expenses incurred with an auto accident. Then, consider how much money you want to spend and see what fits in your budget – you should be able to find a car insurance plan that is right for you with all of these steps!