How to Choose Car Insurance Terms
Car insurance can be offered in a number of different types of policies, with different coverage amounts. Choosing the right types of policies and amounts depends on many factors, and varies with every car and owner. Factors such as state requirements, lender requirements, as well as your insurance budget, all play a role in the terms to seek for a policy. By performing a careful analysis of all factors, you will determine the best terms for your car insurance policy.
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Instructions
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Contact your state's department of motor vehicles to find out how much, if any, liability car insurance the state requires. The agency will tell you the amount of coverage required for bodily injury liability and property damage liability insurance, which will pay for medical expenses and property damage your car could cause. You will have to purchase these policies if required by law, and the information the agency gives you will let you know what policy terms will be necessary.
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Ask your state's department of motor vehicles how much, if any, no-fault insurance the state requires. No-fault policies vary in states where required, but the basic form of no-fault coverage consists of personal injury protection coverage, which pays medical, rehabilitation, work loss, funeral and survivor benefits in the event of your injury or death in an auto accident, regardless of which driver causes the accident. In a limited number of states requiring no-fault insurance, the no-fault policy must also pay for damages to another person's property, but will not pay for any damages to your car.
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Ask your state's department of motor vehicles how much, if any, uninsured motorist insurance the state requires. The agency will tell you the amount of coverage required for uninsured motorist bodily injury and uninsured motorist property damage insurance, which will pay for your medical expenses or damage to your car caused by a driver who does not have insurance.
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Read your loan agreement, if you financed the car, to find out what insurance coverage the contract requires. It the policy states that the loan requires "full coverage", that means collision and comprehensive insurance. The agreement will inform you how much coverage the loan terms require for both collision and comprehensive insurance.
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Determine your collision and comprehensive insurance requirements and how much coverage you need. Collision car insurance pays to repair your car when a collision occurs, while comprehensive car insurance pays for damage caused in some way other than an auto collision, such as fire or flooding. Collision and comprehensive insurance remain options for you to consider if you purchased the car with cash, as the law does not require them, only lenders that finance vehicles.
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Contact car insurance agents, as well as car insurance brokers, to discuss the coverage you want to purchase. Discuss the types of policies you want to buy, along with the amount of coverage you want for each type of policy. Work with the agent or broker and come to an agreement on the terms of all coverages, and then you can sign a contract for a car insurance policy.
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