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Understanding the Features of Your Car Insurance

Dec 28, 2007
Isn't deciding upon a car insurance coverage as simple as choosing the right car to buy? At least, many of us think so while purchasing a car. The fact is that car insurance can actually be pretty complicated. Many people simply nod their head and make their monthly insurance payments but they don't really understand what their coverage offers them.

Car Insurance Basics

Liability coverage can be offered in all likelihood when you buy your car insurance. This is the basic coverage that you will find with any insurance policy and basically what this coverage does is pay for the bodily injury and property damage that is caused to others involved in the accident that you are at fault for.

Together, bodily injury coverage and property damage pays for the medical bills, lost wages and repair or replacement of the property that you damaged. This coverage does not pay for the damage that happens to you or your vehicle.

Liability insurance is often broken down into numbers such as 20/40/10, which means that your coverage includes $20,000 in bodily injury, $40,000 in bodily injury per accident, and $10,000 in property damage coverage.

Unlike in liability coverage, a different type of coverage called as collision or comprehensive coverage repairs your vehicle as well as the vehicle and people you have hurt in the accident caused by you. With this type of coverage you won't be able to receive more than the value of your car, but you will get something to put toward repairs or replacement of the vehicle.

One of the most expensive type of coverage is this. But if you select to have a high deductible you will be able to keep your payments down and still have this coverage that you need if you are involved in an accident. People generally go in for comprehensive coverage and consider it is as the ideal coverage as it also covers the damages caused to your car such as fire, theft, natural disasters, and/or hitting animals in the road.

As a part of your car insurance policy there are other coverage options that you might choose from. One such option is medical payment coverage. This coverage will pay for your as well as your passengers medical expenses when you have been involved in an accident.

Personal injury protection alias PIP is also a coverage you might consider to purchase. This coverage can help pay for those medical expenses but will also help you if you are unable to work, unable to take care of your kids, or if you have to pay for a funeral.

According to me, another type of coverage one can opt for purchasing is the uninsured or underinsured motorist's coverage. This coverage will help you pay for damages if you are struck by an uninsured or underinsured individual.

Other options that you may want to consider are rental reimbursement if you have to rent a vehicle because yours is in need of repair or stolen, towing and labor coverage, and gap coverage, which is coverage that pays the difference between the cash that you receive for a total car and the amount left on the car loan. Although these are add on features, they still come in really handy when someone is in any of these situations.
About the Author
As a smart buyer, you should first compare car insurance. Though it is a legal requirement to have car insurance, think of it as a smart investment, just like a home insurance.
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