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A Beginner's Guide to Car Insurance

A car insurance policy usually consists of six types of coverage. The document may be presented to you in one of two ways. You may be offered all six types of car insurance as a package and asked to pay a higher premium or you may be asked to pick and choose from six types that are priced separately.

Before you examine a policy, you should familiarize yourself with the laws governing car insurance in your state. Each state requires that drivers purchase certain types of coverages with minimum liability limits.

The first component of car insurance is Bodily Injury Liability. This covers you for injuries caused to someone else while driving your car. The insurance industry recommends that your bodily injury liability limits be $100,000 per person and $300,000 per occurrence.

The second type is usually called Medical Payments or Personal Injury Protection. This kind of car insurance covers the treatment of injuries caused to passengers. Depending on the insurance company, this type of insurance might also cover loss of wages as well damages to your passenger's employer.

The third type is called Property Damage Liability. This covers you in the event that your car causes damage to somebody else's property.

The fourth type is called Collision insurance. This covers any damaged caused to your car as the result of a collision with another vehicle or object.

The fifth component is Comprehensive insurance. This part of a car insurance policy reimburses you for such events as fire, theft, falling objects, missiles, explosions, earthquakes, floods and riots.

The sixth offering is Uninsured Motorist Coverage. This makes certain that you are still reimbursed if you suffer injuries as the result of a collision with an uninsured driver.

Experts recommend that you should get at least three auto insurance quotes when shopping for car insurance. Make sure you take the time to compare each policy as both premiums and coverages can vary widely from company to company. It is also up to you to make sure that you fully understand the contents of the written policy before you sign on the dotted line.

As car insurance is a product that is sold to consumers, insurance companies are eager to offer you discounts for purchasing more of their services. This is why insurance experts advise you to request to pay a higher single deductible for a combination of coverages. For instance, if you increase your deductible from $200 to $500, you can reduce your total costs for both collision and comprehensive car insurance by fifteen to thirty percent.

To lower your insurance costs, you are advised to buy a vehicle that is low profile. Expensive or name brand cars can be more expensive to insure simply because they are the favored targets of thieves and vandals.

Most car insurance is based on the expectation that you will drive a predetermined number of miles during the insured period. You may ask the insurance company if they give discounts on insurance if your total mileage is lower than the predetermined number of miles. This is called a Low Mileage Discount.

Some car insurance companies also offer discounts to owners of cars with safety features such as airbags and anti-lock brakes. Some states, including Florida, New Jersey and New York, require insurers to give discounts for cars equipped with anti-lock brakes to ensure safety on the roads.

Some insurers offer discounts if you have not had an accident in three years, are over fifty years of age, have enrolled in a driver training course, have outfitted your car with anti-theft devices or have more than one car insured with the company. Some car insurance companies also give discounts to students who have good grades in school.

To find the best price, it is highly recommended that you shop around and contact as many company representatives as possible to get an accurate quote on your car insurance costs. When it comes to car insurance, it is better to be safe than sorry.



 

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