Learn the Differences in Car Insurance
When looking into car insurance policies, the first thing you should ask is how much coverage you actually need. Many drivers are choosing to reduce their coverage to save money in the current recession.
You are not required to have “liability” car insurance unless you live in New Hampshire and Wisconsin. You are responsible for your own mistakes only. Liability does not cover you if you inadvertently rear-end another vehicle or cause bodily or property damage to someone else’s car. The amount of liability insurance you receive will depend on your policy.
But, liability does not cover you if another person rear-ends your vehicle because they were using their cell phone. In that situation, the amount of money you get from the other man’s car insurance company will depend on their level.
The next policy is “collision”. It covers damage to your vehicle if you are in a collision with another vehicle or object. The “comprehensive” option is even more expensive. Comprehensive insurance covers all types of damage to your vehicle. This includes hail, wind, water and fire as well as theft.
You can also add personal injury protection, rental car reimbursement, roadside assistance and uninsured motorist insurance to your auto policy.
Ask yourself: What level of car insurance is right for you?
Although it’s tempting to believe that nothing bad will ever occur to you and your car, just because you have a great driving record or have had luck with cars that we have owned does not mean that your luck will last forever. Some people may be tempted to buy the lowest level (or liability) of car insurance. However, that does not necessarily mean that that coverage is right.
Ask yourself: “If my car were to be totaled today, would I be able to afford to replace it?” If you answer no, then you may need additional liability. If your car is old, has high mileage, or you no longer make a car payment, then comprehensive insurance might be a good idea. It is a good idea to check the Kelley Blue Book value of your vehicle. Comprehensive insurance is not necessary if your vehicle’s value is less than $2,000
Many people don’t realize that other types of insurance, such as homeowner’s or medical, can cover certain expenses not covered by car insurance. You may not need as much coverage as your other policies might show.
Before you take out a policy, make sure to check the reputation of your insurance company.
Car insurance companies work in the same way as any other company. There are good and bad ones. While the best ones will be more costly, you can still count on them being there when you need them. If your primary goal is to save money on your car insurance, then a less well-respected company offering a lower rate for that old clunker might be a better option. Check out JDPower.com’s car insurance ratings. You can have added confidence when purchasing a policy by knowing how companies are rated.
After you have a better understanding of the various types of policies and compared the ratings of different car insurance companies, it will be easier to choose the right auto insurance policy for you.
