Do you need to shop around for auto insurance, but you're a bit confused about how much coverage you really need to have? These tips will help you make a good decision.
Know The Kinds Of Coverage
Your auto insurance is going to have three kinds of coverage, and it is important to know what they all are. Liability coverage is insurance for accidents that you cause when compensation must be paid to the other driver. There will then be limits for bodily injury liability, which are the medical costs of other people that are injured. Personal property liability will cover the car repair costs.
Comprehensive insurance will cover damage that doesn't happen from an accident. This includes theft where your car is stolen or broken into or if a tree branch falls on your vehicle. Collision coverage is to cover the cost to repair your vehicle, no matter who is at fault for causing the accident.
Know What Coverage Is Important
If there is one type of coverage that you want to have on your car, it's liability coverage. Not only is it mandatory for many states, but it is the one area where you need the most coverage since it is for medical bills. Look at increasing your liability coverage and see how much your insurance rates go up. You may be surprised at how much coverage you get for a small increase in premiums.
Know The Mandates Of Your Loan
If you purchased your vehicle with a loan, it's possible that you have certain coverage limits that you must have. Think of this as having home insurance for a house you have a mortgage on. This is to protect the investment of the lender in case the car is in an accident and you decide to just stop making payments because the repairs are too much money for you to handle.
Know The Impact Of Your Deductible
Your deductible is how much you pay before insurance starts paying for damages. A higher deductible means that you will pay more money if you get into an accident or make a claim, but it will reduce how much you pay. If you decide to have a high deductible to save money, make sure you have the cash on hand to cover your deductible. A common mistake people make is picking a high-deductible plan and not being able to pay it.