Basic Information About Car Insurance
Before purchasing car insurance, it is very important to research your options and determine exactly what sort of insurance policy will best protect you and your vehicle -- while still saving you as much money as possible! Automotive insurance can be expensive, and knowing about the types of coverage, special discounts, and requirements in your state can make a big difference when shopping for an insurance provider. Whether you are buying car insurance for the first time, or looking for a new company with which to do business, reviewing some basic information about auto insurance is bound to help you be a smarter, more informed consumer!
The first, most common type of automobile insurance is liability insurance. In fact, motorists are required to carry liability insurance in every state; minimum amounts of coverage are also specified. Liability insurance requirements are designed to protect all drivers on the road, and here's why: Liability insurance is the type of coverage that pays for any damages you may cause to other drivers, pedestrians, or personal property in the event of an accident. Without this crucial type of insurance coverage, you can personally be sued by people whose health or possessions have been damaged by your driving, and the penalties can cost you your home, vehicle, and other financial losses.
Because of the risk of lawsuits, it is important to carry a sufficient liability insurance policy. While a minimal policy may cover minor fender-benders and other small incidents, an accident that injures another person or destroys their vehicle can be costly. Make sure you are protected with enough liability insurance.
While liability insurance protects other drivers from you, the next several types of auto insurance coverage are designed to protect you from yourself.
Collision insurance, for instance, is an option that can be added to your automotive policy. It is not a requirement by law, but it can be required if the title to your vehicle is held by a bank or other party due to a lease or loan. A collision policy reimburses you for damages done to your car, truck, or SUV if you are ever at-fault in an automotive accident. It is a requirement of most leasers and loan agencies because vehicles that are on loan or lease are typically valuable and more costly to replace than older cars and trucks for which there are no liens. Collision insurance is also recommended for all new cars or cars that are difficult to replace, no matter how they were acquired.
A comprehensive auto insurance policy is similar to a collision policy in that it reimburses you for the loss of your vehicle. However, comprehensive coverage does not apply to motor vehicle accidents. Instead, it applies to damages caused by natural acts like hurricanes, floods, tornadoes and earthquakes, and also acts of vandalism or damages caused by unknown sources. This type of coverage may also be required if your car, truck, SUV, minivan or other automobile is on lease or loan to you, and it is also recommended for new or valuable vehicles even if they have been purchased outright.
Theft insurance is another type of coverage that can be added to your auto insurance policy. Clearly, it covers your expenses if your vehicle is stolen. Before purchasing such a policy, you may want to investigate whether or not your car or truck is a make or model that is frequently a victim of theft in your area.
Finally, it is important for you to determine whether you are buying automotive insurance in a state with a no fault system. There are currently twelve no fault states, including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah, and Washington D.C. Unlike traditional insurance systems, no-fault systems cover drivers for their own medical expenses regardless of who is determined to be at fault in a vehicle accident. Motorists are also limited as to when and how much they can request in damages, barring extraordinary circumstances.
Now that you know the basics, read on to discover ways to save money on car insurance, how to insure student drivers, and more!