Car Insurance What Do You Know?
When making decisions about car insurance, we need to understand the different auto insurance policies and their benefits. We can't just shop for insurance on the basis of cost alone. It is important that we know the answer to questions like:
What Is Comprehensive Automobile Insurance?
What Is A Auto Insurance Deductible?
What Is Full Coverage Car Insurance?
What Is Auto Liability Insurance?
Comprehensive automobile insurance is the part of your car insurance policy that pays when your vehicle is hit by a falling object, damaged by fire, stolen or vandalized. Windshield damage is also covered under the comprehensive section of a personal automobile insurance policy. Comprehensive coverage is also called "other than collision" coverage.
It is the liability section of your auto insurance policy that pays other parties you might have a collision with. Comprehensive coverage only pays you. Therefore it is optional unless your auto is leased or has a loan against it. If your automobile is leased or financed, the lessor or lender will probably mandate that you maintain comprehensive coverage on your automobile.
A automobile insurance deductible applies to the comprehensive part of your policy and the collision section of your policy. Both of these sections of your auto insurance policy are optional. The deductibles for each can be different. Your deductible reduces the amount your insurance company will pay to repair or replace your automobile. If you have $3,000 worth of body work done on your automobile due to a covered accident and have a $500 deductible, your insurance company will pay you $2500.
The higher your deductible is, the lower your premium is likely to be.
Full coverage car insurance is a car insurance policy that includes not only the mandatory liability section, but also the optional comprehensive and collision coverages. These coverages are considered physical damage coverage. Chances are you will need to have full coverage if you do not own your car outright. Your lender or leasing company will likely make you sign a contract that forces you to have full coverage.
One way to pay less for your auto insurance policy is to increase your deductible on your comprehensive and or collision coverages. This means that you will be more at risk, however on an older auto, the risk might be manageable and eliminating the physical damage coverage may be a good idea.
Liability insurance for your car is the part of your policy that can pay the other driver if you are considered to be responsible for an auto accident. This coverage, or proof of financial responsibility is mandated in every state of the US. Your deductible never applies to liability insurance.
Liability insurance is mandatory, but the minimum limits may be way too lowto give you enough protection if you have a car crash that causes a lot of damage. Be sure that you not only understand how this coverage works but that you also get enough coverage.
Understanding how your auto insurance policy works is important if you are going to buy the right policy.