Some kind of auto insurance is required in every state, except Tennessee, which requires that the driver show proof of ‘financial responsibility’ (which most drivers do by purchasing auto insurance). It’s important to understand what all the different kinds of auto coverage are, so you’ll know what combination of coverage is best for you.
Liability coverage is the most important type of auto coverage. It covers the other person’s expenses if you are the driver at fault in an accident. This type of coverage is required in all states but 5, and the price varies from state to state depending on how much traffic there is and how many accidents take place. Insurance with liability coverage is divided into two kinds, personal injury liability and property damage liability. Of the two, you should carry more personal injury liability, because potential hospital bills are far more expensive than potential automobile damages.
Related to liability coverage is collision coverage, which covers your expenses if you are at fault. Comprehensive auto insurance coverage, like collision coverage, pays for damages to your car, but these are for non-accident related damages that come from things like severe weather or vandalism. If you own a new or an expensive car, you should have these types of auto insurance, but if your vehicle is less expensive, get out your calculator and do some math before making your decision or you might end up spending more on car insurance than your vehicle is worth.
Uninsured motorists coverage is, like liability coverage, required in many states. This kind of insurance covers your expenses if you are in an accident with an uninsured driver, or if you are the victim of a hit and run.
The deductible on your insurance is the amount you have to pay before your insurance company will pay anything. For example, if you have a $200 deductible and you get in a fender bender that causes $150 worth of damages, the insurance company pays nothing. If your accident had caused $500 worth of damages, your insurance company would have to pay $300 of that. Generally speaking, it is more cost-effective to have a higher deductible, although you risk paying costs out of your own pocket more often. Raising your car insurance deductible will lower your premium more than anything else will.
Other ways to save on your auto insurance:
Auto insurance is, a large expense, but it is necessary, and having enough coverage will bring you peace of mind. We hope this insurance information has helped you!
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