Car Insurance Advice

While it can often seem expensive, car insurance can prove invaluable if you are ever involved in an accident, either through your own fault or the fault of another. Almost every state requires drivers to be insured, and the ones that don't require you to prove that you are able to pay for damages resulting from an accident before they will let you drive uninsured. Insurance coverage takes a variety of forms.

Types of Coverage

The most important type of coverage is liability insurance. Liability insurance will pay for bodily injury you cause to others, such as medical bills, as well as damage you cause to someone else's property, such as another car or a house. Even if you think you'll never need it, you should carry a sufficient amount of liability insurance. If the damage caused exceeds the limits allowed by your policy, you will be responsible for paying the difference, and could be sued for that amount.

Collision coverage will pay to repair the damage your own car suffers in an accident. This insurance will pay for the actual repair costs or will pay you the total value of your vehicle in the event that it is totaled. Comprehensive insurance will pay for repairs or damages that are not caused by an actual accident, such as fire, vandalism or theft. You should check the specific coverage when purchasing a policy, because certain items such as windshields or custom items may not be covered.

Uninsured motorist's insurance will pay for damages resulting from an accident with a driver who has no insurance or a hit-and-run driver. Under-insured motorist's coverage is necessary when you are in an accident with a driver who does not have sufficient insurance to pay for the damages they cause. If that happens, the other driver's insurance will pay out to the limits of their policy, with the remainder paid by your insurance, up to the limits of your own under-insured motorist's policy.

Premiums and Deductibles

The amount you pay for your insurance, called your premium, depends on the level of coverage you have---the better your insurance, the more you'll pay. You can lower your deductible by lowering your coverage amounts, but you should be sure to carry sufficient insurance to avoid paying out of your own pocket if you are in an accident.

You can also lower your premium by changing your deductible, or the amount that you must pay out-of-pocket before insurance begins paying. For example, you can save money by raising the deductible from $250 to $1000, but remember that you will have to pay more in the event of an accident.

Conclusion

Car insurance rates and coverages vary among insurers. Shop around for the best price, but be sure you understand exactly how much coverage you are getting.

References

• Auto Insurance Basics

Resources

• Insurance Requirements By State