Auto Insurance
Selecting auto insurance is more than purchasing the least expensive policy. Your automobile is a big investment; you want to protect it as well as you can. Many factors should weigh in on your decision making process.
As price may be a deciding factor for your policy, it is important to know how prices of policies are determined. Driving history and experience, type of car, the area in which you live, how far you drive to work and deductibles are all factors in the pricing of your policy.
If the price of the policy seems high, it doesn’t mean you should cut important areas of the policy to reduce overall cost; you may end up being underinsured.
Liability, collision and comprehensive are the three areas of coverage you want to address. Liability protects you if you are at fault for an accident. It should cover you for damages to other cars, yours and the other driver’s passengers, and personal property or pedestrians. Collision covers your vehicle for repair or replacement if you collide with another vehicle, regardless of whose fault it is. Comprehensive coverage safeguards against damage to your vehicle due to theft, fire and flood.
A deductible is the portion of the insurance claim not covered by the provider. The price of the policy is partially determined by the amount of your deductible. The higher your deductible, the lower your policy price will be, due to less risk taken on by the insurance provider. You may also consider having the same carrier for your auto and homeowner/renter policies to strike a better deal.
The correct amount of coverage for each individual will vary. But, by evaluating your policy options and coverage amounts offered, you can decide if you have the correct amount of coverage. Being underinsured is not only unsafe, but could jeopardize your entire financial future if you are held responsible in an accident and your policy does not have enough coverage.
