Auto Insurance Basics
When looking for auto insurance, there are many questions that you might have. Is it required? How much coverage do I need? Where should I start looking? Is a good deal too good to be true?
To answer your first question, yes, auto insurance is required by state laws. Without carrying the minimum amount of insurance on your vehicle, you can’t legally drive.
Still have lots of questions? This article will give you the information you need to be confident in your auto insurance decisions.
Amount of Coverage
Although the state only requires a certain minimum coverage and it might seem like the best deal, this can put you at serious risk if you have an accident. To avoid being underinsured, it is important that you look at different situations to see how much you really need to be insured for.
One example is $100,000 in liability coverage sounds like a lot of money, and will by far cover any damage that your car may incur. However, if you are in an accident that causes serious injuries this will not be enough to cover your medical bills, especially if multiple people are involved. If you only have $100,000 in coverage, you would be responsible for paying the difference in these bills. When you look at it this way, $100,000 doesn’t sound like as much as it did originally.
A general rule is to choose the highest coverage limits, both physical damage and liability, that you are able to afford, to avoid any chance of extra cost in the event of a serious accident.
Each case should be looked at individually, but it is important that you consider your specific situation and your family’s potential coverage needs when deciding on a plan.
Understanding Auto Insurance Terms
When you are getting quotes from various insurance agencies, it can be complicated to understand what the price estimate is actually covering, and if it is appropriate for your needs. Knowing what key terms mean will help you make the best choices for your plan.
Physical damage and liability are terms that can easily be confused, but will be important later in the event of an accident. Physical damage coverage will help pay for physical repairs to your vehicle caused by an accident. You can even look into comprehensive physical damage, which will cover damage to your car that is not caused by an accident, such a storm causes a tree to fall on it. This is different from liability coverage, which will cover any property damage or medical bills that you may be responsible for if you are at fault for an accident.
Uninsured and under-insured coverage, what does it mean? This is to protect yourself from other drivers who have not selected their auto insurance coverage wisely. If their at-fault coverage won’t cover the costs of your vehicle’s damage, or any medical bills, this coverage will keep you protected. Some states require this coverage, but even in states where it is not required, it is a relatively low cost for increased peace of mind.
Discounts
Even though it is important to remember that cost is not the only thing to consider when looking at insurance policy options, it is something that can impact what coverage you are able to afford. Many insurance agencies have multiple discounts available to help you save money on your payments.
- Safe driving record – Installing a device from your insurance provider that will track your mileage and driving behavior can prove that you are a safe driver, and save you money on your premiums.
- Bundle your policies – Most insurance agencies will provide discounts for bundling your policies, such as home, auto, motorcycle, boat, and more. Plus, it is convenient for you to only have one payment!
- Paid-in-full billing – You can pay your complete bill at the beginning or renewal of your policy instead of monthly to save on the overall cost.
- Homeowner – If you own your own home, typically your premiums will be lower.
Each insurance agency is different, so don’t be afraid to ask your agent about any additional discounts that might be available to you.
To learn more about getting the right coverage for your needs, give us a call today at (502) 340-1200! If you are looking to get a quote on your auto insurance, you can fill out our online form here.