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Car Insurance Explained

Aug 6, 2008
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 minimum coverage required by the states varies, and so do some wording in the no-fault insurance states but the concepts are the same everywhere.

The first part of your policy is the collision and comprehensive coverage, which covers the automobile itself. Collision covers those trees which jump in front of your car and rude drivers who put their cars in the way of yours. Comprehensive includes damage and theft (hail, falling trees and the like).

The second section of the policy deals with your liability, the other guy?s damage if you caused the accident. The amount of coverage shows up in numbers. 25/50/10 for example means that the company won?t pay more than $25,000 per person and $50,000 total per accident. The 10 stands for $10,000 for property damage per 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.

Your policy will also cover damage when you are hit by an uninsured or underinsured motorist, including hit and run incidents. If you have comprehensive and collision coverage as well as liability insurance, you may be able to add towing coverage to your policy for a nominal fee.

You can save a lot of money on car insurance by keeping these rules in mind:

1. When it is time to renew your policy, get a variety of quotes and compare the prices. You can do a comparison of rates on many websites - however, look for quotes on insurance with the same coverage as you have now.

2.Check for discounts with your homeowners insurance company. Sometimes they offer a discount if you carry both products with them.

3. Ask if any discounts are available. There are often discounts available for drivers who have higher premiums (such as young drivers) who maintain good grades (if students) or for those who take additional driving courses.

4.See if you really need to cover your own car. Unless you have a loan on the car, sometimes it?s cheaper to drop the comprehensive and collision portion of the policy. Calculate what the company pays you with the Kelly blue book rate, if you total the car, less the deductible. If this is less than two year?s premium, consider dropping the coverage and tucking the money away for a new car, just in case. Don?t be cheap where the liability portion is concerned. The increase cost is worth a little extra coverage.

5.Get a weather beater. These are older cars that you use for driving back and forth to work. Save the good car for special trips. When you assign the most driving to the old car, carry only liability and use the new car with full coverage for pleasure us only, you save wear and tear on the car and the money spent on the beater is more than covered by your savings.
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