Select Page

Auto insurance is required by law, and the amount of coverage necessary will be determined by the state in which you live (where the vehicle is registered). There are seven main primary coverage kinds in an auto insurance policy, each with its own premium line item.  The cost of each of these protection is determined by a variety of parameters, including where you reside, the type of vehicle you drive, your driving history, and in some states even your credit history. The only way to find out how much your insurance will cost is to request a customized quote. When it comes to auto insurance, it’s always a good idea to shop around (one of the benefits of using a broker) and get at least two price quotes from two different carriers.

1. Bodily injury liability protects you in the event that you injure someone while driving (this can include hitting a pedestrian). It also provides legal protection in the event that another party involved in the accident brings a lawsuit against you. You select enough liability coverage to protect your exposed personal assets in the event of a lawsuit as a consequence of a major accident. The expense of repairing or replacing your car is not covered by bodily injury liability. In most cases, you’ll want the same level of coverage for all of your vehicles. 

2. Medical payments coverage compensates for the injured driver and passengers in your vehicle’s medical bills. 

3. Uninsured motorist coverage covers for your injuries in an accident caused by an uninsured driver. According to a recent research by the Insurance Research Council, around 13.8% of U.S. motorists (or one out of every seven) are driving without insurance and breaking the law.

4. Comprehensive Coverage compensates you for losses incurred as a result of your vehicle being stolen or being destroyed by flood, fire, or animals, but it does not cover collision. Choosing a large deductible is one way to keep your insurance premium rates low, however a low comprehensive deductible can be beneficial claims related to glass damage (eg. a rock hits your windshield and requires replacement).

5. Collision coverage pays for damage to your vehicle when it has impact with another vehicle or property. Because it is restricted to the market value of your vehicle, for older vehicles valued under $5,000 you may consider eliminating this coverage. Self-insuring against certain losses can be a good idea if you have enough cash on hand to cover the charges if the need arises. 

6. Property damage liability covers you if your car causes damage to another person’s property (ie. vehicle, home, building, lightpost). It also includes legal defense coverage in the event that a lawsuit is filed against you. For example, if you’re backing out of your driveway and accidently hit the gas instead of the brake, crashing into your neighbor’s house and ending up in their living room with your car, property damage liability coverage can pay for repairs. 

7. Rental Car Coverage (Loss of Use) applies when an insured’s car is unable to be driven due to losses covered by a comprehensive or collision coverage , rental car coverage compensates for the cost of a rental vehicle. 

Shorthand descriptions is often used in the insurance industry to explain the amount of coverage provided by each policyFor example, 250/500/100 means you have $100,000 in per-person bodily injury coverage, $250,000 in per-accident bodily injury coverage, and $100,000 in property damage coverage. For homeonwers we advise to have a higher limit by adding personal umbrella policy (which increases liability protection by increments of $1 million).

If your child plans on driving, he or she will need insurance. Because insurance companies recognize that teenage drivers are more likely to cause accidents, they will charge you a higher premium to cover this additional risk. The only way to know how much more insurance will cost once your young driver receives his or her license is to request a quote from your agent. Knowing the answer to this question before your child obtains a driver’s license may persuade you to wait till he or she is older. If this does not sit well with your kids and you decide to have them apply for a driver’s license, you can still save money on auto insurance by not buying another vehicle. If you do buy a car for your adolescent driver, you should consider not getting him or her a new automobile, as it is more cost-effective to have your child drive the oldest and least-expensive car you own, since this keeps your insurance costs lower than they would be otherwise. Naturally, if you own an older vehicle, make sure it is still safe to drive and up to date on maintenance.  Saving money is never more significant than the safety of your family. Your rate is calculated by an insurance provider based on specific statistics and facts about you and other drivers. These characteristics include your age, gender, where you reside, the sort of automobile you drive, your driving record (whether you’ve been in an accident or received a traffic ticket), and a variety of other considerations (eg. annual mileage estimate). Although some of these elements are beyond our control, those that are should be properly evaluated prior to purchasing a vehicle. W hen deciding which automobile to buy for yourself and your family, make sure to get a quote from your insurance carrier for each vehicle. This could help you make a more informed and cost-effective automobile purchase.