Weigh car insurance options
Auto insurance is a type of property insurance. The make and model of car you drive, your age and your driving record usually influence your premiums. It is no secret that younger drivers, especially those driving sporty vehicles, pay more for auto insurance. Save money by understanding what your insurance covers and when it kicks in.
- Collision covers damage to your vehicle or replacement after an accident. You can lower your premium by raising your deductible. Keep in mind, though, that a higher deductible means you are absorbing more of the risk. If you get in an accident, you will pay more out-of-pocket.
- Comprehensive covers damage to your vehicle from vandalism, theft, natural disasters or contact with animals. It may cover your windshield and hail damage. Again, raising your deductible (assuming more of the risk) can lower your premiums.
- Liability comes in two major forms: bodily injury (you cause harm to another person) and property damage (you harm another person’s property). Most states will require a minimum level of liability coverage. In fact, if you drive an older car, carrying only liability can greatly lower your premiums.
- Personal injury protection covers injuries to you or your passengers as well as lost wages. It is generally optional coverage.
- Uninsured motorist covers you in case you are hit by an uninsured or underinsured driver. Check with your state to see if you are required to have this insurance.
- Rental car covers a car rental if your primary car needs repair. It is optional, but can be handy if you have to get to work or school.
Understand your state’s requirements. The Insurance Information Institute offers a chart of Automobile Financial Responsibility Laws by State Links to an external site.. Once you know your insurance requirements, shop around for the best rates. Before you buy auto insurance, read the 10 Things You Should Know About Buying Auto Insurance topic. Ask for premium discounts for having a good driving record, high grades, antilock brakes or air bags.
Use this Auto Insurance Worksheet Download Auto Insurance Worksheet to keep track of your vehicle coverages and costs so you can cost compare annually.
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