Buying car insurance can be more difficult than buying the car itself. Whether you are buying your first car or hundredth, auto insurance can be baffling. Many suggest you buy as much car insurance as you can, which is a total waste of money and resources. There are many questions that need to be answered before you buy your car insurance such as: How much will it cost? Which coverages do you need? What is required, and what is optional? And last but not least, do you need to do all this stuff?
All these basic questions will help you choose your car insurance, making you a smarter consumer. It will not only save you money but also your time. To further know about what you’ll need and what not, continue reading!
What is Car Insurance?
Car insurance is the contract between you and the insurance company that covers you against financial loss in an accident, theft, and vandalism. The insurance company pays for your losses related to property, liability, and medical in exchange for you to pay the premium as outlined in the policy. It covers you against the third party costs related to damage, injury, or deaths in an accident due to your fault. Some policies ensure to cover your costs, including repairs to your vehicle.
Do Car Insurance Premiums Vary from Person to Person?
Car insurance premium varies depending on age, gender, driving experience, accident, and other relevant factors. Not so great driving record, fewer years of driving record, and desire for complete coverage will lead you to higher premiums. However, you can cut your premiums by increasing your deductible. You can get auto insurance quotes which give you an estimate for what your rates could be with the insurance carrier. Visit www.americaninsurance.com to learn more about the best free insurance quotes.
Types of Car Insurance Coverage:
Liability insurance pays other party’s medical expenses and auto repairs where you are found to be at fault for the damages caused in an accident. Such matters usually go to court to determine the party at fault. You or your insurance company doesn’t have to pay anyone if you are proven right.
2. Comprehensive Coverage
This type of insurance covers occurrences such as car damaged in a hurricane, a tree falls on the car, damaged caused by animals, and other such incidents. Comprehensive insurance doesn’t cover the repair or replacement of your vehicle damaged in an accident with another vehicle.
3. Personal Injury Protection (PIP)
PIP, also known as no-fault coverage, covers the medical expenses of policyholder as well as other passenger with you at the time of the accident. Whether a car hits you or you run into a car, this insurance pays for your medical expenses.
4. Collision Coverage
Collision coverage is opposite to comprehensive coverage. It pays for repairs only when you hit another object with your car. It doesn’t cover the other party or the medical expenses. This coverage requires a deductible and the limit of collision policy is equal to the value of your car.
5. Medical Payments Coverage
This insurance is optional but it comes with great benefits. It covers policy holder as well as other passengers in your car. It also covers family members listed on the policy if they are in another car and get into an accident. The main benefit of this insurance is that it will pay for your additional medical expenses when you have already used your health insurance.
Other insurances that come under car insurance categories are listed below:
- Food Insurance
- Uninsured Motorist Coverage
- Gap Insurance
- Mechanical Breakdown Insurance
- Insurance Extras