Maybe you are a driver shopping for an auto insurance policy and do not know what exactly to look for or maybe you are sitting at your work desk staring at that car insurance bill wondering if there is any way you can save a few dollars. In either case, the first logical option to lower your car insurance premiums is to raise your deductible. The problem with this is that it comes with extra risk and extra out-of-pocket costs in the case of a car accident. Auto insurance can be broken down into several types of coverage, some of which are mandatory, others that are not. Drivers should ask about these categories to decide how much car insurance they need. The categories of coverage include bodily injury liability, property damage liability, personal injury protection, uninsured motorist protection, collision and comprehensive coverage and some additional extras.
Bodily injury liability coverage is required in most states. The coverage reimburses the driver of the vehicle when the driver and passenger in the other vehicle need medical treatment. It protects the driver from any lawsuit that can arise after a car accident. This type of coverage is sold in increments that determine how much coverage the driver has per person involved in an accident. In general the amount of coverage you should have is based on the assets you need to protect. The more assets you have, the more coverage you should purchase. You should also include lifetime earnings potential in your calculations for what limits to carry, as court awards are not something you can ever walk away from. The price you pay for this sort of coverage is calculated with several factors in mind, including age, marital status, driving record, and where you live.
Property damage liability is another category of coverage that is required in most states, with state-required minimums. Your local independent auto insurance agent will know what the minimums in your state are, but they can be as low as $5,000. The problem with buying the minimum amount of coverage is if you get in an accident with someone driving a $50,000 vehicle, the minimum coverage will not come close to covering the cost of the other driver’s auto repairs. Your local independent agent will recommend having at least $50,000 in property damage liability coverage, ensuring you are protected in the case of a accident.
Personal injury protection is an area that most drivers can get away a minimum amount of coverage. Personal injury protection, offers you and your family members funds to pay for medical bills in the event of a car accident. If you already have a health insurance policy and a life insurance policy then you likely do not need any sort of personal injury protection in your auto insurance policy.
The uninsured or underinsured category of coverage pays costs when a driver or his or her family get in an car crash with a driver who is uninsured or underinsured. Even though auto insurance policies are required in all states, there are many drivers on the road who drive without proper insurance, making this coverage essential. It is normally recommended this coverage limit natch your basic liability limits.
Collision coverage reimburses the driver the full cost of repairs or replacement of a car in the event of an accident. Comprehensive covers the driver in the event that a car is damage from a natural disaster, vandalism or theft. The coverage is based on the deductible, the lower the deductible, the higher the policy will cost. It is best to choose the highest deductible you can afford. This category of coverage makes up nearly half of your total auto insurance premium.
There are some extra options drivers can consider when shopping around for an auto insurance policy. Some of these extras include rental-car reimbursement, towing reimbursement and full glass coverage. Drivers should speak to their local independent auto insurance about these extras when shopping for the right auto insurance policy for them.
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