Selecting the Right Auto Insurance Policy
Carrying auto insurance is not just a smart move - it's the law.
All drivers are required to carry auto insurance in all 50 states so purchasing auto insurance is imperative. And in today's rough economy, finding an affordable auto insurance policy is just as important.
If you are shopping for auto insurance coverage, it is important to know the facts about auto insurance - from the many coverage options available to ways you can save money - in order to select the right auto insurance policy for your driving needs.
Making Sense of Auto Insurance Policy Options
When choosing an auto insurance policy, you will be asked to determine what coverage options you would like your policy to include. Making sense of these options can mean the difference between having the coverage you need and winding up with the short end of the stick.
The first two options of which you should be aware are bodily injury coverage and liability coverage - both of which are required by law in most states.
Bodily injury coverage is related to any medical costs incurred by other drivers or passengers who are hurt in a vehicular accident caused by the policyholder. Liability coverage is related to any damages to another person's property that is caused by a vehicular accident caused by the policyholder.
The next two coverage options are related to damages to the policyholder's vehicle: collision coverage and comprehensive coverage.
Collision coverage is related to damages to the policyholder's vehicle that are caused by another vehicle or object, while comprehensive coverage is related to damages to the policyholder's vehicle that are caused by a non-vehicular incident, such as fire, theft or vandalism.
When purchasing auto insurance, you also should consider adding uninsured/underinsured motorist coverage. This auto insurance coverage option will cover costs related to a vehicular accident in which the other driver - who is at fault for the accident - either does not have auto insurance or has auto insurance that will not sufficiently cover all of your incurred costs.
In addition to these five coverage options, there are several other options available depending on the insurance company you select and the type of policy you purchase:
- Medical payments coverage will cover any medical costs incurred by the policyholder resulting from a vehicular accident, regardless of who was at fault.
- Towing and labor coverage will cover costs related to towing the policyholder's vehicle as well as any work performed on the vehicle while it is still on the road.
- Rental car reimbursement will cover costs related to use of a rental car if the policyholder's vehicle is being repaired.
- Sound system coverage, offered by some insurance companies, will cover costs related to replacing or repairing a high-end car sound system if it is damaged or stolen.
- Pet injury coverage, also offered by some insurance companies, is generally a facet of a policy's collision coverage and covers costs related to any injuries incurred by the policyholder's pet stemming from a vehicular accident.
Auto Insurance Discounts that Can Save You Money
To help make carrying auto insurance more affordable, there are several discounts from which you can choose. Just a few of the most common discounts include:
- If you also carry homeowners or renters insurance, most insurance companies offer a multiple policy discount for those who purchase both policies from the same company.
- If you have a clean driving record, you should be able to qualify for a safe driver discount.
- Vehicles with special features like anti-lock brakes or an alarm system can save money thanks to a safety and security device discount.
- Drivers who attend an approved defensive-driving course can qualify for a defensive driver discount.
It is important to note that not all insurance companies offer the same discounts, and some discounts, like the defensive driver discount, are not available in all states so make sure to check with those insurance companies you are considering to find out what discounts they offer for your state.
