published by: Admin
How to compare car insurance rates
Before you can compare auto insurance quotes, you need to understand some car insurance basics. Car insurance is part of a larger type of insurance calledproperty and casualty, which also includes home insurance, boat insurance and renters insurance, among other types. Insurance is a financial product. Car insurance does not actually protect your car; it protects your finances. Depending on the coverage you purchase, an auto insurance policy is designed to protect you from the financial devastation that could result from being in a car accident. Insurance is also a pool. Everyone pitches in a little money — your premium amount — so that if and when an accident happens, everyone loses a little bit, but no one loses everything. If you are shopping for auto insurance, you have probably heard that you should compare car insurance rates. But what are you looking for? How should you compare different car insurance quotes? And how do you know if you are getting a good deal?
Top car insurance companies
Perhaps the first thing you should do when you are shopping for car insurance is decide what companies to request quotes from. To do this, you will need to decide what factors matter most to you. Are you looking for thebest coverage for your needs? Or the cheapest policy possible? By deciding what you want from an insurance company, you may be able to narrow down which companies to approach.
Types of car insurance coverageAn auto insurance policy is a package of several coverages. The types and amounts of coverage you choose will depend on your specific situation. Some common coverages are:
- Bodily injury liability: This is designed to cover the cost of injuries that you cause to another party in an accident.
- Property damage liability: This pays for the damage that you cause to someone else’s property in an at-fault accident, like damage to another car, a building or personal property.
- Uninsured motorist and underinsured motorist coverage: These coverages can pay for your damages and injuries if you are hit by a motorist who does not have any insurance or does not have enough insurance to cover your expenses.
- Collision: This covers the damages to your car caused by colliding with another vehicle or object.
- Comprehensive: Often called “other-than-collision” coverage, this pays for damages to your car caused by a variety of scenarios, including theft, vandalism, storm damage, weather damage and hitting an animal. Adding comprehensive and collision to your policy means you are purchasing “full coverage.”
- Medical payments coverage: This pays for your and your passengers’ medical bills stemming from an accident, regardless of fault. Depending on where you live, it may be mandatory, optional or not available.
- Personal injury protection (PIP): This coverage is similar to medical payments, but also covers lost wages and the cost to hire someone to do household tasks if you or a passenger is unable to complete them. It is often required in no-fault states, may be optional, or, like medical payments, may not be available depending on where you live.
- Gap insurance: If you have a loan or lease on your vehicle, this coverage pays the difference between your loan amount and the depreciated value of your car if it is totaled.
When comparing car insurance quotes, you will likely want to make sure that you have requested the same types and amounts of coverage from each company. That way, you can more easily see which company can offer a lower premium for the coverage you need.
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