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Things to Know About Car Insurance Polices

Apr 14, 2008
Automobile insurance coverage is mandated under the law in some states. An auto insurance policy can save you financially in the event of an accident. Understanding auto policies can be difficult, but necessary to ensure adequate coverage. Policies differ in the coverage they provide, which makes it important that you understand the coverage listed on an automobile insurance policy.

Collision coverage is the amount you will received for your car following an accident. The policy deductible will be removed before receiving it. Ideally, collision coverage equals the value of the car at the time the policy is in effect. The value of cars depreciate with age so collision insurance coverage should not exceed that value. This will ensure that policy is not costing more than the car is worth. Premiums reflect the depreciating value of the automobile annually.

In addition to collision coverage, there is comprehensive coverage. This pays for damages to your car in case of theft or some other mishap, such as a tree falling on your car. You will have a deductible for both collision and comprehensive coverage that is usually the same amount. The higher the deductible, the more money you can save on your premium.

Collision or comprehensive coverage may not be required in some states. Other states require drivers to have liability coverage. Liability pays for any costs for self or others, including medical and vehicle damages in case of an accident. States that require liability coverage usually have a minimum coverage requirement.

Liability coverage includes bodily injury to any party involved in the accident. Bodily injury usually has a limit of $100,000 with an aggregate of $300,000. Each individual who is injured in an accident may receive up to $100,000 in damages, but less than $300,000 may be paid out on any claim. This amount can be increased or decreased and coverage will be calculated into the policy premium.

Liability coverage includes damage to vehicle and other property. Homes, vehicles, personal items, and mailboxes are examples of personal property covered under a liability policy. Coverage for property damage is usually about $50,000, with an aggregate of $100,000.

The amounts of coverage are subject to personal discretion. However, you have to carry the proper amount of coverage required by law if you live in a state where liability coverage is mandated.

The more you understand your automobile insurance policy, the more money you can save by changing the amount of coverage as well as the deductibles. In order to make sure that you have the adequate amount of coverage for you, take a look at your insurance policy and read it carefully. Make sure that you have enough coverage in case you are in an accident or in some other catastrophic event so that you do not have to pay personally.
About the Author
Interested in automobile insurance? Go and visit www.aboutautomobileinsurance.com and learn about how to save on automobile insurance costs and other related information.
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