The Essential Of Car Insurance |
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Jo Thomas
3 November 2008
When it comes to car insurance, it seems like there are so many companies offering such a range of policies that it becomes a concern for the customer as to whether or not a certain type of necessary coverage is included and if the overall cost of the policy is affordable. Trying to balance the budget with the necessary coverage can be overwhelming, and it is important to know in advance, what you need in terms of auto insurance and what to expect from an insurance provider.
While you can opt for all sorts of policies and additional coverage, you should first be concerned with basic car insurance and what it covers. Once that is settled, there are some questions that you should pose to your insurance provider before you settle on any particular package. You also need to assure that you are paying the lowest possible price for your coverage, and you should read over all the terms of the policy, looking for certain points of concern before you sign the dotted line. When the basics are in order, you may also consider additional coverage for other situations.
Coverage Under General Car Insurance Policies
A basic policy for car insurance requires liability only in most states, if you are the title holder. If you have a car note, you are typically required to carry full coverage. Full coverage for an auto policy includes:
Bodily injury liability
Medical or personal injury protection (PIP) coverage
Property damage liability
Collision coverage
Comprehensive coverage
Uninsured/underinsured motorist coverage
Liability means that you will be responsible to pay for reparations to damages that you cause. Therefore, liability insurance covers not you but anyone with whom you may have an accident. Bodily injury liability coverage assures that, if you are in a car accident in which you are deemed to be at fault and someone in the other vehicle involved is injured, your policy will pay for their medical care. By the same token, property damage liability covers any damage to the other vehicle or vehicles in that accident.
Medical or PIP coverage is set up to help pay for injuries you sustain in a car accident when the other party's insurance is insufficient; the other party has no insurance; the accident is deemed to be your fault or to be 50/50 fault; or you experience a "hit and run". This area of the policy can cover everything from medical bills to lost wages and even funeral costs. Collision coverage is for your own car under similar circumstances; however, here you will have a deductible to be met prior to coverage being enacted.
Uninsured and underinsured coverage will also assist with these matters, should you be involved in a hit and run or the other driver is not sufficiently insured.
Comprehensive insurance covers property damage to a car that doesn't occur due to an auto collision but rather some other accident, such as a tree limb falling on the car or hail damage. Theft is also covered under this part of your policy, which again carries a deductible.
Questions for Your Provider
Don't just assume that everything is as it should be when you go to purchase a car insurance policy. There are some important questions to consider asking your insurance provider about the policy prior to purchasing.
How much coverage do I need? State requirements vary, and you'll also want to determine laws based on ownership. If you are not the titleholder (you are still paying a car note) there may be additional requirements. How do I insure others on my policy? Learn how to add others to the policy, including new teenage drivers, before it's time to do so. How do I file a claim? This is important so that, should you need to make use of your policy, you have the ability to do so immediately without having to seek answers first.
Ways to Save on Car Insurance
Insurance can be expensive, so you might want to make every effort possible to save on your car insurance. Be sure to shop around for the best prices. Different providers will offer different rates for the same package. Find the lowest cost and opt for that company. Also, when car shopping, you should compare the quotes on insurance for different cars. Obviously, a sports car is going to incur a higher premium than a small sedan. Reduce the coverage on your older cars, too. If they are paid off and your state allows, carry liability only. Consider purchasing packaged insurance - car, homeowner, and life insurance - all from the same provider, as most companies will discount all these insurances if purchased together. Keep your credit score up, too, since it's been found that people with low credit ratings are more likely to file a claim and will be charged higher rates.
Don't forget to ask about various discounts that may be available to you and your family, such as safe driver discounts, good student discounts, and vehicle safety feature discounts.
Beware Before Signing
When it comes time to sign the dotted line, be sure that everything that was discussed in person is listed in the policy contract and nothing has been changed. Don't be a victim of the "bait and switch" procedure. Watch out for clauses, too, that enable the insurance
provider to raise your premium at any time without changes to the industry or your driving record. If you don't make a claim and there's been no alteration to the laws of the land, your cost should not increase.
Additional Coverage to Consider
Aside from the basic coverage options, most car insurance providers will offer a number of other choices that can be added to your policy for an additional fee. If you have a car that is older than and perhaps not as reliable as you'd like, you should probably consider towing and rental insurance, which covers the cost of a tow truck as well as a rental car (usually for up to 30 days). The rental insurance also helps when you have an accident and can't be without a car while repairs are being made. Roadside assistance is another option that is offered by some companies so that you never have to worry about changing your own flat tire or adding oil to your engine on the side of the road.