When attempting to make an auto insurance comparison not having sufficient knowledge of the industry can make it difficult. Auto insurance is broken into many parts and having a good general understanding of each of its elements is important to compare it accurately.
So first off let us discuss liability insurance in general
Liability insurance is required by most state’s laws, although the minimum amount of coverage required varies from state to state. Understanding those limits and what this coverage entails is very necessary in making an auto insurance comparison.
$24,000/$50,000/$24,000; does this look familiar? Those numbers represent the most common way to represent the limits of this coverage. The first number represents the maximum body injury liability for each person in an accident, the second is the overall maximum counting all passengers in the vehicle and the third represents the maximum property damage liability.
For instance if we were to go on the numbers in the example above, in the case of an accident that was your fault, your insurance company would only pay out an absolute maximum of the figures used in the example.
So if that person is found at fault and the necessary amounts exceed his or her coverage limits, they will likely be held responsible to pay the additional amount out of pocket.
The uninsured/underinsured protection coverage
There’s always the risk of finding yourself in an accident with someone who is underinsured or simply does not have insurance at all. This is why there is an option available to have extra protection especially for these situations. You will of course pay more for this and have to pay a premium for it.
The comprehensive and collegian coverage type
Also known as full coverage, comprehensive and collision insurance insures a person’s car in the event they are at fault during an accident or other types of damage occur to their vehicle.
An understanding of this type of coverage is essential in order to make an effective Auto Insurance Quote Comparison, as it can impact pricing greatly.
This coverage will appear in a format similar to $500/$500. This means that in the event something happens to your vehicle that is covered by your comprehensive or collision insurance, you will have to pay $500 per incident out of pocket and the insurance company will cover the rest.
Optional towing coverage and rental reimbursement
There are a number of optional coverage features that can be in a policy which people often miss. These additional options can actually make quite a lot of difference to the overall policy so they really do need to be looked into.
With rental car reimbursement you will get coverage up until a certain amount should you need to hire a rental car while your vehicle is in for repair after an accident.
Roadside assistance coverage allows the insured to receive a variety of emergency services (depending on the plan) for free or a reduced charge. A person having his or her car towed is one example of this type of coverage.
What about medical coverage?
Each state in the United States has different requirements regarding optional and required medical coverage, for instance in some states you must have no fault medical so that you are covered regardless as to whether or not you’re at fault, however other states do not require this.
Other states do not have this provision so insured are able to carry a certain amount, depending on their state laws and needs. Understanding medical coverage is essential to make an auto insurance comparison as it can cause rates to vary greatly.
The bottom line is you must not do as so many do and just look for the cheapest price. You may end up paying more in a year sometimes for the insurance but overall it will end up being better in the long run when that unexpected accident comes up.
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