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Buying Auto Insurance 101 - the Basics

When it comes to purchasing a new vehicle, there are several things that you consider such as your driving needs but also your budget. Determining the right vehicle for you will take time and plenty of research. The same is true for auto insurance. Just as there are ample cars to choose from, there are a number of different types of auto insurance available. You need to choose a policy that will fit your budget but also provide the coverage that you require.

You need to know that your auto insurance premium will vary depending on a number of factors including but not limited to where you live, your driving record and even your credit score. You need to know how to look at a policy and tear each part of it apart to fully understand the coverage and deductibles. By doing so, you can make certain that you are choosing the right type of auto insurance coverage for your lifestyle.

While this information may seem a bit intimidating, we are here to help you understand all of this with some general information regarding auto insurance coverage. So, whether you are just trying to get a better rate on your current auto policy or if you are purchasing a new car and will need a new auto policy, it is vital that you are well informed on the different types of auto insurance and other relevant information.

Why Get Auto Coverage?

Throughout the country, most states legally require that a driver have at least liability auto insurance. If you are deemed at fault for an automobile accident, you could be held legally responsible for any property damage and bodily injury that is caused as a result of the accident; and you need liability insurance to help cover such claims. Without such insurance, or not enough coverage under such insurance, your assets (home, money in your bank, etc.) could be taken by a court order to pay the liability charges and claim. If you were to be required to appear in court to defend yourself, legal costs are high and may not be affordable. It is better to be safe than sorry because an accident can occur at any time.

Types of Coverage

An accident is what brings out the benefits in your auto insurance policy. A car collision can happen at any time and can come out of the blue. You never know when it may happen and how much damage might be caused. In addition, you have no idea whether or not the other involved party in the accident will be insured or not as the number of uninsured motorists is on the rise. Please have a look at FAQs and other research to determine the types of coverage that you need. The major types of coverage to consider are:

  • Bodily Injury and Property Damage Liability Coverage (damage or injury to other parties)
  • Collision Coverage (damage to your car from a collision)
  • Comprehensive Coverage (theft, vandalism, etc.)
  • Personal Injury Protection (medical expenses)
  • Uninsured Motorist Coverage (accident with uninsured motorist)

Factors That Affect Your Auto Insurance Premiums

There are a number of factors that affect your overall premium including but not limited to:

  • Gender, age and marital status.
  • Driving record.
  • Credit rating.
  • Members in the household.
  • Location.
  • Coverage limits and deductible amount.
  • Type of vehicle.

Discounts to Take Advantage of

Auto insurance rates are on the rise and it is always important to stay well informed of the discounts that are available to you. Discounts will help you save on your auto insurance, as they will reduce your premiums. There are some discounts listed below and not every auto insurance company will offer these while some companies will actually offer some that are not listed here. Make sure to ask your insurance company what discounts they have available, which could include:

  • Multiple drivers for the same vehicle.
  • Multiple vehicles on the same policy.
  • Insurance packages – grouping home, auto and life together.
  • Safety devices – anti-theft, air bags, car alarm, etc.
  • Low mileage annually.
  • Good student – grades generally required to be at least B average.
  • Good driver – clean driving record.
  • Discounts for certain professions (e.g., military).

Get the Best Value with Auto Insurance Rate Quotes

When you are shopping for the best auto insurance policy, you will want to obtain quotes from several different companies and compare them, which you can do on sites like QuoteLab.com. Make sure to request quotes for the same exact coverage so that the quotes are accurate. Find out the different types of discounts that each company offers and if the quote includes any discounts.

Keep in mind that when obtaining a quote from an auto insurance company, it is just an estimated quote and your actual premium may differ slightly. Since it is just an estimate, you may ask for a non-binding application prior to switching from one company to the next so that your new independent insurance agent can submit your application for no cost. You can then find out whether the new insurance company will indeed insure you and how much your policy will cost before you go ahead and cancel your current auto insurance policy.