Auto Insurance Basics
Whether you just got your license, just got your first car, or just want to learn more about driving laws and safety, auto insurance is a concern you probably have. It is important to understand different terms, auto insurance rates, and which types of insurance are required and which are optional.
Liability insurance is required in most states, and it protects you against the cost of damage and injury that you may cause another person in an accident. This is often split into two categories: bodily injury and property damage. It is important to learn the required limits of coverage in your state, and it is never a bad idea to invest in more than the minimum just in case.
Medical payments insurance covers the cost of immediate treatment of injuries caused by a car accident, and you and all passengers in your vehicle are covered no matter who is at fault for the accident. Depending on the particular policy, this may also compensate for some amount of lost wages, funeral expenses, and pain and suffering. Personal injury protection, commonly referred to as PIP, is similar to medical payments insurance but generally has broader coverage.
Underinsured and uninsured motorist insurance protects you against injury caused in an accident in which the at-fault driver’s liability insurance is inadequate. Most states do not require both of these, but may require one or the other.
Optional types of insurance include collision insurance, which pays for damage to your vehicle when you are at fault; comprehensive automobile insurance, which covers damaged caused by an unknown party or an “act of God;” and other extras like towing insurance, glass insurance, rental insurance, and emergency roadside assistance.
Your auto insurance rates will be higher if you request optional types of coverage and if you choose to cover more than the minimum amount that your state requires.
Rate Factors
As you probably know, many different factors can affect the premium you pay for your car insurance. Insurance companies generally take into account things like where you live, what kind of car you drive, your age, your gender, the level of coverage you want, and your driving record, among other things. Your driving record and level of coverage tend to have the most significant effect on your insurance rates overall.
An increase in your premium may be caused by a number of different things. If you apply for a new policy, renew an existing one, change drivers or vehicles, or are involved in a traffic accident or violation, your rates may go up. Your rates may also go up whenever your state allows a rate increase.
Getting the Best Rates
Finding the best auto insurance rates to fit your needs can be relatively easy with a moderate amount of effort. Most insurance companies have Web sites that can help you get quotes and can be searched for more specific information. There are also many Web sites managed by third parties that can help you compare the rates of multiple companies based on information such as your age and where you live. Even if you are just looking for local companies, search engines and many Web sites can help you locate those. If you don’t have access to or prefer not to use the Internet, you can often find local companies with help from a car dealer, other insurance company, or your local government or tourism office.
However you choose to look for quotes, it is never a bad idea to get a few different ones so that you can compare what kind of coverage you can get at what price from which company and select the best deal for your needs. Auto insurance rates are an important concern for all drivers, but those who take the time to understand different types of coverage and specific policy details can easily find a good deal.
By Kristin Cleveland