If you operate a motor vehicle, it's very important for you to understand the basics of car insurance. Driving a car is an important part of daily life for many people. No one likes to think about being in an automobile accident, but it's a fact that vehicle collisions occur quite frequently. Making sure that you are properly insured is an important part of being a responsible driver.
Understanding Insurance Requirements
If you finance the purchase of your car, your lender is going to require you to carry a collision and comprehensive insurance policy. This type of coverage provides protection that will defray the costs of repairing your vehicle in the event it is involved in an accident or other covered event.
Individuals who own their cars outright, you are not obligated to carry this type of coverage. However, it's important to realize that even a minor fender bender can result in very expensive vehicle damage. If your car is damaged in an accident that is your fault and you do not have collision coverage, you will have to pay for the entire cost of repairs on your own.
If you live in a state that has a mandatory insurance law, you are legally obligated to carry liability insurance. This type of insurance doesn't have anything to do with providing repairs to your own vehicle. Instead, it protects the interests of others whose property might be damaged through accidents that are your fault.
Making Sure You Are Fully Covered
When selecting car insurance, the best option is to choose a policy that provides you with a combination of liability, collision, and comprehensive coverage. When you have these types of coverage in place, you'll be protected against legal claims from individuals who experience loss related to accidents that might be your fault. You'll also be able to rely on your insurance company to cover the bulk of the expenses associated with repairing your car if it is damaged as a result of a situation covered under the terms of your policy.
Read the Fine Print
Before making a final decision about the best car insurance policy for your needs, make sure you read and understand the fine print of the agreement. What one company describes as full coverage might be very different from a policy that another provider defines with the same terminology.
Pay close attention to the deductible amounts associated with each type of claim, so that you know exactly how much out of pocket expense you will be expected to cover if you have to file a claim. It's also important to make sure you understand the limits of liability, so that you are aware of exactly how much protection you really have.
Additionally, it's important to pay close attention to the exclusions detailed in the fine print of your car insurance policy. For example, if you live an area where hurricanes are likely to occur, you probably don't want to select a car insurance policy that has an exclusion for wind damage in the comprehensive coverage.
Select a Reputable Insurance Provider
While choosing a policy that meets your needs is very important, it's also necessary to make sure you choose a reputable insurance company to handle your automobile coverage needs. Make sure the provider has the appropriate licenses necessary to operate in your state, and verify that the organization is in good standing with your state's insurance commission.