Choosing the right auto insurance provider is an important decision. While pricing is an important factor, car owners should also make sure they have the right coverage.
The availability of many different brands and policies present many options, but can also create a lot of confusion. Therefore, if you are shopping for a new auto insurance policy, be sure to take your time and decide which factors are the most important to you.
Understand different types of Auto Insurance Coverage
The first thing you should look at is the coverage, which is the center of all insurance policies. It is important to understand different types:
– Liability coverage is the amount payable by the insurance provider for damages to the other party if you, the policy holder, are at fault
– Comprehensive coverage will cover damages caused by animals, weather conditions, fire hazards or similar causes;
– Collision coverage pays to repair your car in case of collision, no matter whether who is at fault.
– Gap insurance applies if you still have a car loan on the vehicle. Gap insurance pays for the difference between the car value and the amount you are still owing, in case the vehicle is destroyed
– Medical coverage covers the medical expenses for you and other passengers in your car who are injured because of an accident. This coverage does not depend on which party causes the accident.
How much coverage is enough?
– There are state laws that require the minimum liability coverage you must have. Remember that this is only a minimum that you must meet, it is not necessarily enough. Keep in mind, if you are the liable party in an accident, and your coverage is not enough to pay for the damages, the other party can go after your personal assets to make up for the differences.
– Medical coverage is often not required. However, remember your well-being always matters and it is recommended to make sure you have the coverage you need.
– Collision coverage is more important when the value of your vehicle is higher. If your car is older and perhaps cheaper to replace than to fix, then you can save money by choosing a higher deductible or forgo the collision coverage altogether. This will save you on monthly insurance bill, however, the repairing cost of the car will be all on you in case of an accident.
Before choosing an auto insurance provider, make sure you understand the policies, including the fine print, thoroughly. If you have difficulty understanding any terms or conditions on the policies, talk to a LegalShield expert for further help.