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
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
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.