People tend to overlook their car insurance coverage and assume that all insurance policies are the same. Although most policies cover collision, liability, and comprehensive insurance, there are many other aspects to car insurance that may be overlooked or not covered by cheaper policies. Let’s look at all the coverage options and decide which one is most important to you.
Basic Coverage
Liability
All car insurance policies in the majority of states must include this coverage. This coverage covers injuries or damages to third parties resulting from an automobile accident, or any other event that involves your car.
Collision
This coverage covers any damages to an automobile that result from an accident. Anyone leasing a vehicle is required to have this coverage.
Comprehensive
This covers damage to your vehicle that is not caused by a collision. This covers theft, vandalism, and fire or water damage. If you are the owner of your car, comprehensive and collision may not be necessary.
Advanced Coverage
Full/limited Tort
This clause allows you to lower your insurance rates in return for a waiver of your right to sue third parties in the event that an accident occurs. This is an example of insurance companies protecting their own interests and not something that is wise for small savings.
Towing
Towing coverage covers the cost of towing your vehicle under certain circumstances. However, this feature is included in most roadside assistance programs.
Uninsured Motorist Insurance
If you are involved in an accident with uninsured, or underinsured motorists, this will cover any medical and property damage costs.
Gap
Gap insurance covers the difference between your car’s blue book value and the remaining loan amount. This insurance is beneficial for those leasing vehicles with very little to no down payment, or until the loan balance has reached a higher amount. You could end up paying a lot if your car is damaged.
Factors That Determine Your Rates
There are many factors that will affect the final rates you pay, including which coverage options you select. Some of these may be more important with different insurance companies.
These rates are based on your gender and age, so they are not your responsibility. It is a general rule that rates will rise if you are younger than your age. Women generally get more than men. Your rates will be affected by where you live. Your rates will rise if you live in an area with higher crime. This is because your car is more likely to be stolen or broken into.
Drivers who are more likely to be in an accident and drivers who have been cited for speeding or other driving violations can expect to pay higher rates. FYI Credit scores have an impact on insurance rates and credit cards. Rates will be determined by how you use your vehicle, such as how often you drive it and what you use it for.
Your vehicle is the next. Insure more expensive vehicles, and sports cars, than more family-oriented vehicles. Your rates can be reduced by including an alarm system and safety devices in your vehicle.
Summary
Although many people wish to believe that their car will not be in danger and that there will never be an accident, most people will find themselves in a situation where their car insurance will be required. Start by looking at rates online. There are many websites that allow you to compare coverage and rates from multiple insurance companies. These websites are great for finding companies that provide the coverage you need at a reasonable price.