The Basics of Auto Insurance

If you drive a car you need auto insurance. There can be no argument about that. However, the basic requirements for auto insurance are not always enough to cover you in an accident.

How do you know if you are adequately insured? Are you paying too much for auto insurance? Can you reduce your insurance premiums? These are all valid questions. This article will answer these questions and more.

You’re about to discover all you need to know about auto insurance.

What type of auto insurance do you need?

To make sure you have adequate insurance for your car without paying more than you need to, requires some forethought.

I’ll be providing the information you need to make this crucial decision by pointing out the important factors that you need to consider when buying auto insurance.

Liability Coverage

The issue of liability insurance is often overlooked, despite being very important.

There are two categories defining liability insurance. One is the cost relating to personal injury. This would be medical expenses and other costs relating to an injury. A person may not be able to work for a long period whilst recovering from an accident and may claim for loss of income.

The second type of liability insurance is for coverage from damage to property. Apart from the vehicles involved in the accident, there can be additional damage, like a streetlight, fence, or business property.

Uninsured Drivers

When you’re in an accident and the other driver is at fault, it is assumed that they are liable for any costs you may incur as a result. However, if the other driver is uninsured, you may be left to foot the bill. While additional insurance to protect you against uninsured drivers may cost you more, it can prove to be a great benefit when the need arises.

Collision vs Comprehensive Cover

We mostly think about an accident when considering auto insurance. Yet there are many ways in which your car could be damaged, like a natural disaster.

Collision insurance covers an accident where you collide with another vehicle, object, or pedestrian whilst driving your car. Comprehensive insurance covers your vehicle for other factors, like fire, hail, snow, and falling objects.

It’s important to check exactly what you’re covered for and if you will receive full payment to replace your vehicle if needed.

Auto Insurance Costs

There are a number of factors that will determine how much you pay to insure your car.

  • Where you live. In some areas, auto insurance will cost more depending on the risk and the average costs for vehicle repairs in that region. In urban areas, with high crime and accident rates, it is often more expensive to insure your car.
  • Premiums vs Deductible. You may choose to pay a lower in premium in favor of a higher deductible. This means that you will save on monthly bills, but you will have to pay a higher deductible when you claim.
  • Driver’s Profile. Your driving record, age, and gender may affect how much you pay for insurance. Teenage drivers usually cost more to insure than experienced drivers. Driving violations may also increase your premiums and/or deductible. Some insurance companies offer discount rates for female drivers are they are statistically less likely to claim.
  • Type of insurance. The type of auto insurance you choose and the amount for which you are covered will greatly affect how much you pay. There are several factors that may influence these costs. Generally, the more you pay, the more cover you get. Though this is not always the case.

You need to carefully consider all the options before deciding what type of insurance you need and which company to use. Weigh the pros against the cons in terms of cost vs benefits.