Guide to Buying Car Insurance

Guide to Buying Car Insurance

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  1. If you live in the United States, you probably live in a state that requires car insurance. Additionally, if you are still paying off your car, you may be required to carry insurance. Even if this is not your case, carrying auto insurance may be a smart move for you. It can protect you from an expensive liability in the case of an accident.

    Types of Car Insurance

    Liability Insurance

    Liability insurance covers you in case you are at fault in an accident. It covers some or all of the cost of repairs and medical expenses for the other party in the accident. Most states have minimum requirements, but you can purchase higher coverage amounts for better insurance.

    If your car is old and paid off, you may want to carry only liability insurance. Older vehicles may not be worth repairing after an accident. Carrying only liability can save a lot of money compared to full coverage insurance.

    Full Coverage Insurance

    Full coverage insurance includes liability, but also coverage for your own vehicle repairs and medical bills. It may also include coverage for a stolen vehicle, broken windshields, weather damage, towing, and car rental.

    Types of Coverage

    Collision

    Collision covers your vehicle in the event of an accident. If the vehicle needs repairs, they will be covered to the amount specified in your policy after you pay your deductible. If the vehicle is totaled, you will receive the market value of your car, not necessarily the replacement value. Check the auto insurance policy before you purchase it so you know what you’re getting.

    Medical

    Liability covers the other party’s medical bills; but medical coverage covers the medical bills of you and your passengers. This is in addition to any other medical coverage you have, so it may cover the cost of deductibles.

    Personal Injury Protection

    The difference between medical coverage and PIP can be confusing. Medical coverage is just that. However, PIP covers much more than just medical. It can cover lost wages, recuperation expenses, home nursing, and funeral expenses.

    Uninsured and Underinsured Motorist

    With these, you are covered if you are in an accident with an uninsured or underinsured driver. If you don’t have it, and you are in an accident with someone who has no or too little insurance, your insurance company may not pay your expenses.

    Comprehensive

    Comprehensive is coverage for theft, weather damage and other damage not caused by an auto accident.

    Car Rental Insurance

    Car rental insurance reimburses if you have to rent a car after an accident.

    Towing Insurance

    Some companies offer towing insurance to cover you if your car breaks down. It is not usually as comprehensive as a motoring plan, but it can be very affordable when packaged with your other insurance.

    Buying Auto Insurance

    Shop for Quality

    Cheap car insurance doesn’t necessarily mean good car insurance. If it’s not a major company, you will want to do some research before you purchase a policy. Not all companies are easy to work with when you have a claim.

    Shopping for Price

    The cost of car insurance can vary greatly between companies. You should always compare auto insurance quotes. Start with large companies with which you are familiar. Ask them if they offer discounts. Some companies will offer a discount if you take an online traffic course.

    You need to make a decision about the amount of deductible you can afford. The higher your deductible is, the lower your premium will be. However, if the deductible is too high, you may not be able to cover after an accident.

    Depending on the state in which you live, some of these policy additions are optional and some are mandatory. Your auto insurance agent will know which you are required to have.

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