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Finding Car Insurance The Best Way

March 30, 2011

One of the things that drivers in the modern world have to deal with is car insurance. In most states of the US, and in most developed countries, having coverage is a legal requirement for driving. Those without coverage can have their license revoked, and be subjected to lawsuits that can end with garnished wages for life.

Purchasing a policy is not exactly fun, but it can be more hassle-free than most people realize. The important thing is to have a basic understanding of what the terms of a policy mean, so that you can make your own decisions about what kind of coverage is worthwhile. The time spent learning this vital information is typically worth it.

To start with, the first two numbers on the policy are generally referred to as liability/bodily injury, and are separated by a slash mark. These numbers denote the mandatory part of a policy, and a certain minimum coverage is required by your state or other governing body. Liability/bodily injury coverage pays out when people are injured or killed, or their property damaged, in an accident that is decided to be your fault.

There are generally two numbers to liability/bodily injury, or sometimes three. The biggest number denotes the total amount the company will pay towards all of the parties injured or bereaved by the incident. The second number denotes the maximum payment to an individual, for a single incident. This means that two people may each receive the maximum individual payment, up to the maximum total payment, but neither could receive more even if there was only one injured party.

Collision, comprehensive, and uninsured motorist coverage are all optional. Uninsured motorist coverage is always recommended, however. This coverage pays for your injuries or property damage in the event that you get into an accident that is not your fault, but the other driver does not have coverage.

Comprehensive and collision coverage, on the other hand, should be considered carefully. The former covers damage done to your car that is not related to other vehicles, such as theft or vandalism. The latter covers damage done to your vehicle if it is run into while parked, or during an accident that is your fault.

Comp and collision, as they are often called, should be considered carefully because they usually only provide a benefit up to the value of the car, and generally also have a deductible. The difference between the deductible and what your car is worth determines whether it is a financially sound decision to maintain this coverage. Older cars that aren't worth a lot are generally best left without this coverage.

Online quotes are your friend. You should check with several car insurance companies before you make a decision, as the same basic coverage can vary widely in price from place to place. If you aren't comfortable actually purchasing a policy online, that's fine, but knowing where to go and what you want before entering the office can save you a lot of time and money.