Auto insurance protects you financially in the case of damage to your car or injuries during an auto accident. When you are choosing auto insurance, there are a few things to consider. These factors include your state’s mandatory coverage minimums and the level of liability coverage you want to carry. Of course, it’s also important to find a plan that fits your budget. That means looking at both premiums and deductibles when you select your policy. Premiums are your regular payments for insurance coverage, and deductibles are payments taken at the time of an accident or injury claim.
Types of Auto Insurance
You may be surprised to learn that there are several different kinds of auto coverage. The insurance you select will have a big impact on the cost of your policy. The major categories of auto insurance are:
- Liability coverage: Most states require drivers to carry liability auto insurance coverage. With liability insurance, your insurance will cover costs for injuries and property damage to others if you cause an accident. Liability insurance is often split into bodily injury liability coverage and property damage liability coverage. Most states require both.
- Collision coverage: Liability coverage helps you meet the financial burden of paying for damage you cause to someone else’s vehicle. Collision coverage is for your own car. If you have collision coverage on your car and you’re in an accident, your insurance policy will help to pay for the repair costs to your vehicle.
- Uninsured motorist/Underinsured motorist: These two types of coverage help to protect you in the event of other drivers not having the appropriate amount of insurance. Despite auto insurance being a requirement in most states, some drivers still hit the road without it. Uninsured motorist coverage will protect you and your car if you are hit by an uninsured driver or involved in a hit and run accident. Underinsured motorist coverage helps you make up the difference if you are in an accident with a driver whose coverage is insufficient to pay for your damages.
- Medical payments coverage: Standard auto insurance policies may fall short of fully covering medical costs. Medical payments coverage helps to cover that gap. This kind of coverage kicks in no matter who is at fault in the accident.
There are also some specialty auto insurance policies. Gap insurance is often required in car leases. It bridges the gap between the insurance payout and the actual value of the car. If you have a classic or vintage car, then traditional car insurance may not be the right choice for you. Instead, you will need classic car coverage.
Premiums vs. Deductibles
One area of confusion in buying auto insurance is the difference between premiums and deductibles. Premiums are the fees you pay for your insurance. Your deductible is the amount you have to pay before your insurance coverage kicks in when you make a claim.
Generally, the higher your premium is, the lower your deductible will be, and vice versa. Your premium and deductible will also be partially dependent on the level of coverage you decide to purchase. The coverage level may be different for different parts of your policy. For example, you may have property damage liability coverage of up to $25,000 and up to $50,000 of bodily injury liability coverage. These coverage levels will also impact the overall cost of your policy.
Factors That Influence Car Insurance Needs
There are many different things to consider when you’re buying car insurance. One is, of course, budget. A high deductible plan has lower premiums. However, it can be a risky choice if you are unsure if you will be able to pay the deducible if you need to file a claim. Finding the right balance of reasonable premium payments plus a realistic deductible is a good strategy.
You should also consider the value of your vehicle, so you’re not paying for insurance that exceeds the value of your vehicle or underinsuring your car. Finally, consider the level of coverage that is right for you, from liability to collision and medical payments.
National Mobile Home Insurance Company Can Help
National Mobile Home Insurance Company is focused on finding personalized auto insurance coverage for our customers. We can help, whether you simply want your state’s minimum coverage or a comprehensive policy. Let us help you find the right policy today. Call us at 1-800-388-6780 or fill out our contact form.