General Car insurance covers automobiles as well as other personal vehicles such as boats or motorcycles. When a person is in an accident, then car insurance will cover repair and medical costs minus the deductible that the insured person must pay. Also, if a vehicle is stolen or totaled, the insurance company will provide reimbursement for the value of the vehicle.
Auto insurance policies consist of six major categories: bodily injury liability, property damage liability, personal injury protection, collision, comprehensive, and uninsured/underinsured motorists coverage. Most states require motorists to carry both categories of liability insurance, and motorists will want to purchase enough coverage to protect their most important assets, such as their home, in case they are at-fault for a motor vehicle accident. Personal injury protection will cover medical expenses for the driver and passengers but will not cover other financial damages, such as wages lost by the injured party.
Uninsured/underinsured motorist coverage will pay for bodily injury in most states as well as property damage in a few states when that damage is caused by a motorist with no insurance or insufficient insurance. Collision insurance covers the costs of an motor vehicle accident, while comprehensive insurance covers any kind of damage, such as a tree falling on a car. Motorists should carry comprehensive and collision insurance when their cars are newer or of high value. As the car depreciates, however, the cost of comprehensive and collision premiums may outpace the replacement value of the vehicle. Most owners of older cars choose to drop comprehensive and collision as their cars age so that they can save money.
Certain actions may allow drivers to save money on car insurance. Installing a vehicle protection system or an immobilization device may allow drivers to get discounts on premiums. Also, certain vehicles cost more to insure, and motorists may consult the Insurance Institute For Highway Safety for vehicle-specific insurance claim costs.
Buying insurance as part of a group, such as buying insurance through a union or through a community group, may produce substantial savings. Additionally, buying multiple types of insurance from the same insurer, such as auto, home and life, will save a substantial amount of money. Another way to save money on car insurance is to maintain good credit. In many cases, insurers set rates based on a policy holder’s credit score and financial history. In addition, drivers may consider raising their deductible, if they have enough money saved, in order to lower their premiums. There are lots of services offering car insurance quotes online for those wishing to compare deals.
According to the Insurance Research Council, approximately one in seven drivers does not have car insurance. Additional statistics indicate that uninsured motorists are 10 times more likely to cause traffic accidents. AAA estimates that the average cost of a motor vehicle fatality is $6 million when medical costs, lost earnings and property damage are all taken into account. All motorists need to protect themselves against catastrophic loss by purchasing sufficient car insurance coverage. There are lots of services offering car insurance quotes online for those wishing to compare deals.
Resources:
http://www.usa.gov/topics/travel/cars/insurance.shtml
http://www.iihs.org/
