Understanding the Features of Your Car Insurance
Many people think that when they buy a car that choosing their insurance will be just as straightforward as finding the right car. The fact is that a car cover 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 cover offers them.
Car Insurance Basics
When you buy your car insurance you will likely be offered liability cover. This is the basic policy that will pay for the bodily injury and property damage that is caused to others involved in the accident that you are at fault for.
Bodily injury is what pays for medical bills and lost wages and property damage is what will pay for repair or replacement of the property that you wrecked. This cover 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 policy includes $20,000 in bodily injury, $40,000 in bodily injury per accident, and $10,000 in property damage.
Collision or comprehensive cover is different from liability in that if you cause the accident your cover will repair your vehicle as well as the vehicles and people that you hurt. With this type of policy 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.
This is the most expensive type. But if you select to have a high deductible you will be able to keep your payments down and still have recourse if you are involved in an accident. Comprehensive policies will also cover damages to your car such as fire, theft, natural disasters, and/or hitting animals in the road, making this type ideal.
There are other options that you might choose to make a part of your car policy. One such option is medical payment. This will pay for your as well as your passengers medical expenses when you have been involved in an accident.
You may also want to consider purchasing PIP, or personal injury protection coverage. This 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.
Another type that you may want to consider purchasing is uninsured or underinsured motorist’s. This 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, and gap, which pays the difference between the cash that you receive for a total car and the amount left on the car loan. These are add on features but can come in really handy when you are in any of these situations.
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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