Car insurance is something which we rarely think of, but all need. You may not spend a lot of time thinking about your policy unless you really need it. Most of us for this reason have little idea if we are really getting a good deal on our insurance. Learning a bit about car insurance can help you to avoid being taken in by smooth talking insurance salespeople and buying a policy with coverage you don’t really need.
The coverage which you are required to carry varies from state to state, as does the exact wording of the regulations in states with no-fault insurance; however, it is much the same in each state.
The most important part of your car insurance policy is the first section, which covers your automobile itself. This part includes two subsection; collision and comprehensive coverage. Collision is meant to cover those situations where a tree “jumps right in front of you” while driving and those unfortunate incidents when another driver thoughtlessly places their car in the path of yours. Comprehensive covers a lot of things: hail damage, theft and so on.
The second part of your policy covers liability - the damage done to another car when you are at fault in an accident. This coverage is shown in numeric terms, such as 25/50/10 (this means that your insurance company will cover up to 25,000/person and 50,000/accident - the 10 means your insurance company will cover 10,000 in property damage/accident.)
Medical payments are there to cover any party involved in an accident, no matter who is at fault. Your car insurance policy also covers you in case you are hit by a car while walking. If you don’t have health insurance, this part of your car insurance helps to cover medical expenses. It may also cover medical expenses which your health insurance does not.
There are additional coverages in the policy such as uninsured/under insured motorists, which pays if someone hits you without any or enough coverage. This also covers a hit and run. Also towing may be added for a nominal sum if you have full coverage, both liability and comprehensive and collision.
You can save a lot of money on car insurance by keeping these rules in mind:
1. Before renewing your policy, get some different quotes and compare the prices. There are a lot of websites which let you do this all form the comfort of your own home or office. Be sure to look for quotes for insurance with the same coverage as you have already.
2. See if your home insurance company offers a discount for buying your car insurance from them as well.
3. Ask if there are any available discounts. You may be able to get discounts if you are a young or higher risk driver, such as a young person or student. These discounts may be dependent on keeping up good grades or taking driving courses.
4. You may not need to carry full coverage for your car. If you don’t have a loan you are paying on the car, you can sometimes save a lot of money by dropping the comprehensive and collision portions of your coverage. Compare the payment your insurance policy will pay out against the Kelly blue book value if your car is totaled. If this cost is higher than two years of premiums, you might want to consider dropping this part of your policy and using the savings to buy a newer car. However, keep the liability insurance - it’s important.
5. Think about getting a beater and using it for commuting and short trips. You can carry full insurance on your good car and carry only liability insurance on the beater. You can save money on your insurance and wear and tear on your good car this way.