Auto insurance is one of the most valuable types of insurance anyone can have, for it protects the holder against loss in case of a car accident. But it is of vital importance to compare auto insurance rates; for not every insurance policy is appropriate for all car owners because of differences in age, the type of car owned, or the state in which one lives. Unfortunately, these days too many people pay too little attention to their insurance coverage. And that will be the subject of this article.
First of all, it is important to realize that there are several different types of auto insurance coverage. There is liability coverage, for when one’s car causes bodily or property damage; collision & comprehensive coverage, for damage to one’s car from whatever source, including theft and “acts of God” such as storms and fires; uninsured motorists coverage, for cases where one was injured by an uninsured driver (and likewise, there is also underinsured motorists coverage to compensate for the difference between one’se medical expenses and the limits of the other party’s insurance coverage); medical payments coverage, for paying a small part of medical bills resulting from a car accident; and of course no- fault insurance (note that this covers mainly medical bills and loss of income).
All of that having been said, let us now get down to the subject of how to compare auto insurance rates. The first factor to take into consideration is how much damage would an accident caused by a given holder cause in repair and medical expenses? There is usually a minimum required amount of coverage, which varies from one state to another. The next factor is whether you could afford to pay the market value of your automobile out of your own pockets. If not, then you would be good to purchase collision & comprehensive coverage (described above). If your car is a new vehicle, such that you owe more than its value, then consider gap insurance to cover the remainder (collision & comprehensive insurance generally cover only the actual value). And how much would you pay in medical costs if you were hit by an uninsured or underinsured driver?
In order to compare auto insurance rates, you should go to one of the innumerable websites that give auto insurance quotes. Such sites will typically ask for such information as your ZIP code; the year, make, and model of your vehicle; the primary purpose for w which you use it (commuting to work or school, business, or pleasure); whether you own or lease the vehicle; and the daily and annual mileage figures. Then you select a coverage level (standard, superior, basic, or state minimum); amount of desired collision and comprehensive deductibles (you choose separate figures for each); the expiration date of your current insurance policy; the name of your insurance company; and how long you have been insured. You also fill out basic driver information– gender, marital status, birth date, credit rating, education, occupation, whether you have had a traffic citation within the past three years, and whether you need SR- 22 filling. (The Motor Vehicles Departments of some states require an SR- 22 form as proof that the driver has that state’s minimum required insurance coverage.)
Auto insurance companies use the information given above to determine the amount of risk involved, and hence how high premiums should be charged. If any of the factors change— for instance, if the driver buys a new car, or when he ages— then his insurance premiums may change with them.
So always be sure to gather the information that you need to determine what kind of insurance plan works best for you. That way, you will not end up paying for things you do not need, while failing to pay for things you do need.