Money Matters - Simplified

Selecting the Right Car Insurance

Looking for car insurance but don't know but don't which one to choose and how much cover you need? Fret not. Here’s how to settle on the best policy.
Auto insurance is simply about how much you are willing to pay out of your own pocket versus how much you want the insurance company to cover. Once you decide this, you're all set to purchase your auto insurance policy.

All car owners require car insurance to protect their vehicle from any inconvenience, but purchasing an an auto insurance policy can be confusing.

Every one wants a policy that takes care of their expenses in the event of an accident, theft, vandalism or in any other case where damage is caused to their vehicle.

The best way is to figure out your own auto insurance needs is to examine potential policies and know how much risk you are willing to take.

Several factors like being clear about your needs, discounts you qualify for, state legislation requirements, etc., may help you choose the right insurance policy.

1. Choosing Balanced Deductible
The most important thing while deciding insurance policy is selecting a deductible. It is the part of the damage that the user agrees to pay.

The premium you pay, or the price of total coverage annually, can be lowered by choosing a higher deductible. In other words, if you are willing to bear higher costs, you can lower the total cost of your insurance.

2. Selecting the Right Car
If you have not purchased a car yet, select the car that is considered a safe bet by the insurance companies.

The cars that are prone to more problems or are stolen more are likely to cost to high in terms of insurance.

The other factors that are taken into consideration while arriving at a premium are age, sex, marital status, place of residence, driving frequency and driving record.

3. Know Your State Laws
Be aware of the your state laws For instance, forty-seven states require a car owner to purchase liability insurance.

Fifteen states, including Florida, Maryland, Michigan, Massachusetts, New York, and New Jersey, require you buy personal injury protection (PIP). This insurance covers medical expenses and lost wages of the user in case of an auto accident.

4. Types of Auto Coverage
Auto insurance policies are in fact a package of different types of insurance coverage. Some of these are required by the State Law and some are optional.

The different types of insurance coverages are:

Liability
It covers accidental bodily injury and property damages to others including medical expenses, pain and suffering and lost wages. Damaged property and automobiles are also covered. This coverage also pays defense and court costs.

Collision
It covers damages caused to your vehicle by collision with another vehicle or object.

Comprehensive
Damage caused by fire, wind, hail flood, vandalism or theft are covered by comprehensive insurance.

Medical Coverage
It covers medical expenses caused by an auto accident regardless of the fault.

Personal Injury Protection
Some states require personal injury protection (PIP), which pays for medical expenses of the driver, injured in auto insurance regardless of the fault.

Uninsured Motorist
This covers damages caused by a driver who doesn't have liability insurance.

Underinsured Motorist
This pays damages when an auto accident is caused by someone who has insufficient liability insurance.

Rental Reimbursement
This type of coverage pays small amount for rental car that you are using while is undergoing repairs due to damage as a result of accident. Often this coverage has a daily allowance for a rental car.

Most insurance policies combine a number of these types of coverage. Do not hesitate to ask your insurance company about any discounts they offer. It could save you some cash.