Understanding liability insurance
Liability insurance is one basic type of coverage you can get. It covers damages you may cause to other drivers, passengers, or property while driving your car. Liability insurance in most states is mandatory, and the minimum coverage requirements vary from state to state. Typically, liability insurance covers the following:
Bodily injury liability covers the lost wages, medical expenses, and other damages you may cause to others if you are at fault in an accident.
Property damage liability covers damages to other people's property, such as their car or fence.
Liability insurance does not cover the damages to your car or injuries you may suffer in an accident. You'll need to consider other types of insurance to get that coverage.
Comprehensive coverage explained
Comprehensive coverage is an optional type of insurance that covers damages to your car that are not caused by accident. For example, comprehensive coverage would pay for the damages if your vehicle is stolen or vandalized. It also covers damages caused by natural disasters such as floods, hurricanes, or earthquakes. Comprehensive coverage usually has a deductible, which you pay out of pocket before your insurance kicks in.
Comprehensive coverage isn't required by law, but considering it is a good idea, especially if your area has a high risk of theft or natural disasters.
Collision coverage explained
Collision coverage is not required by law, but considering it is a good idea if you have a new or expensive car. It can also be helpful if you are leasing a car or have a loan on your vehicle.
Personal injury protection (PIP) and medical payments coverage
Personal injury protection (PIP) and medical payments coverage are two types of insurance that cover medical expenses if you are injured in an accident. PIP is required in some states, while medical payments coverage is optional.PIP covers medical expenses, lost wages, as well as other damages regardless of who is at fault in an accident. On the other hand, medical payment coverage only covers medical costs and is limited to a specific amount.
If you have health insurance, you may not need to consider these types of coverage. However, if you don't have health insurance or limited coverage, PIP and medical payments coverage can provide additional protection.
Uninsured and underinsured motorist coverage
Uninsured and underinsured motorist coverage is another type of optional insurance that can protect you if you are in an auto accident with a driver who doesn't have insurance or doesn't have enough insurance to cover the damages.
Uninsured motorist coverage covers damages caused by a driver who does not have insurance. On the other hand, underinsured motorist coverage covers damages caused by a driver who does not have enough insurance to pay for the damages.
These types of coverage can be helpful, especially if you live in an area with many uninsured or underinsured drivers.
Deductibles and premiums
Deductibles and premiums are two critical factors when choosing an auto insurance policy. A deductible is paid out of pocket before your insurance kicks in. Usually, a higher deductible means a lower premium, but you'll have to pay more out of pocket if you are involved in an accident.
Premiums are the amount you pay for your insurance policy. The amount you pay depends on several factors, including your age, driving history, car type, and where you live.
When choosing an auto insurance policy, it's essential to consider the deductible and the premium to find a policy that fits your budget.
Factors that affect auto insurance rates
Your driving record:
Your age:
The type of car you drive:
Where you live:
By understanding the factors that affect auto insurance rates, you can make informed decisions about your coverage and find ways to save money on your policy.
How to choose the right auto insurance
Choosing the right auto insurance policy
Determine your coverage needs:
Shop around:
Consider the deductible and premium:
Review the terms and conditions:
By following these tips, you can find a policy that provides the coverage you need at a price you can afford.
Standard auto insurance claims and how to file them
If you are in a car crash, you must know how to file an auto insurance claim. Here are some common types of claims and how to file them:
Collision:
Liability:
Comprehensive:
