When it comes to buying auto insurance, there are many options to choose from. The basics of auto insurance coverage include liability and comprehensive coverage, which pay for repairs to your car after an accident. Collision and comprehensive coverage pay for injuries or property damage that you cause in a car accident. Personal injury protection and uninsured/underinsured motorist coverage cover the cost of medical bills for you and your passengers if another driver hits you. Liability coverage is the legal minimum for drivers, but there are many people who drive without it. Uninsured motorist coverage is also available, although it is optional in some states.
The price of auto insurance varies greatly, depending on several factors, including the type of vehicle and driver. Drivers with clean records are usually charged less than those with multiple accidents. Drivers who drive for long distances and daily commutes may be charged more than drivers who drive only locally or for short periods of time. Drivers with a poor credit history are also likely to pay more for auto insurance than drivers with clean records. Although many states prohibit auto insurance companies from rating drivers based on credit history, the fact remains that the cost of auto insurance varies from one company to another.
The amount of coverage you need and the type of deductible you choose will influence your auto insurance rates. A $500 deductible, for example, will reduce your settlement amount by $550. If you need to file a claim for a total of $1500, you may want to opt for a higher deductible, and avoid high-deductible policies. If you don’t drive a lot, consider buying a car with lower mileage or a pay-per-mile policy.
You might have to pay more for comprehensive coverage if your lender requires it. Comprehensive coverage protects you from losses that aren’t caused by collision, including theft, vandalism, floods, earthquakes, and contact with animals. In many states, full coverage is the minimum required by law, but it can also be beneficial if you have assets. You can also opt for no-fault coverage, which covers medical expenses of you and your passengers in a car accident.
Liability coverage is essential for drivers to protect themselves and others in an accident. This insurance covers bodily injury and property damage in an accident. If the other driver has less insurance, you will likely pay more than the limit on your coverage. You may also want to consider a higher coverage limit to protect yourself and other drivers in the event of an accident. This can be a valuable feature that helps protect you from a lawsuit if you cause an accident.
Comprehensive and collision coverage may be important if you own the car outright. While liability insurance will cover damage to other drivers’ vehicles in a car accident, comprehensive coverage will cover the costs of your own car. For example, if a tree branch fell on your car and caused $3,000 of damage, comprehensive coverage will pay the remaining $2,000 in repairs. Comprehensive coverage also pays for damage to stationary objects or other vehicles. Most states require both collision and comprehensive coverage.