It is mandatory to have auto insurance to drive on the roads in the US. The most basic and common types of policies available to consumers are auto insurance polices. Like any other insurance policy, they involve specific terms and conditions applicable to the policy coverage.
How to Find Right Auto Insurance
Here are some guidelines for selecting the right auto insurance and to avoid confusion as the market is filled with all kinds of offers and coverage.
Three elements of auto insurance
An auto insurance policy consists of following elements:
- The insurance company, who is offering the policy;
- The agent, who is the insurance company's representative;
- The consumer, who is looking to purchase a policy, and the terms, which state the responsibilities, coverage and legalities of the insurance policy
Finding Right Insurance
The first thing to do is to find the right insurance company as it is the most important step in protecting your interests. We need to identify the right insurance company based on their rating of A.M Best Company and the other insurance regulatory agencies. You also have to find out the coverage offered and the rates. Check the state laws and regulations with regard to auto insurance and decide the types and extent of coverage you would need.
Types of auto insurance coverage
I. Liability
Liability protection provides coverage for the damages to the property or injury to others in an accident for which you are responsible. Most of the states require that every driver should carry a minimum amount of liability insurance as stated below:
- $10,000 to $50,000 of bodily injury per person
- $20,000 to $100,000 per accident
- $5,000 to $25,000 for property damage
II. Umbrella liability
Insurance experts believe that drivers should carry more than the minimum liability as required by law. Umbrella liability coverage pays for any amount above basic liability to have adequate protection and it is relatively inexpensive – as low as $200 to $300 annually for a $1 million policy.
III. Collision and comprehensive
Collision covers the costs of accident associated losses such as repairing or replacing your vehicle in the event of an accident with another driver. The cost of this protection varies depending on the value of your automobile, your driving record and the amount of your deductible, among other factors.
Comprehensive covers damage to your vehicle caused by mishaps other than collisions, such as theft, vandalism, hail or fire.
Though both of them are not mandatory by state laws, the banks and finance companies require them as a condition of your lease or financing arrangement.
III. Uninsured and underinsured motorist
This coverage typically covers personal injuries and certain property damage in the event of a collision with a hit-and-run driver, an uninsured driver or a driver whose insurance coverage is inadequate to cover the losses on injuries and vehicle damage.
Know your deductibles
A deductible is the amount of a claim that you’ll be responsible for paying. Your insurance then pays the remaining amount. For example, if you file a claim for a $1,000 repair and your deductible is $200, then you would pay $200 and your insurance will pay $800. Usually it would the policy holder’s responsibility to pay first for repairs.
In general the higher deductible will get you the insurance at lower rate. That means you could save on your costs of insurance by raising your deductible from $200 to $500 thus lowering your premium rate.
Discounts on Auto Insurance
Many insurers offer special discounts if your vehicle includes safety features such as safety restraint systems, anti-lock brakes or anti-theft devices. Some of the insurers offer discounts for drivers who participate in a safe-driving course, so make sure to ask your insurer about any potential savings. There are some insurers who can offer you even 15% discount when you take auto insurance along with home insurance.
Right Agent
Once you find the right insurance company by your analysis through the online portals or by phone calls you need to get the quote. Get a right agent to do the proper analysis and get you the exact type of auto insurance need and buy the same. This whole exercise would help you get the right auto insurance.