Do you understand all the stipulations in your car insurance policy?
You may have heard the terms deductible or premium, but if you don’t truly understand the different parts of a car insurance policy, you will not know how to choose the best coverage. You must also know what additional or optional coverage will help to protect you in the event of an accident.
Factors that affect the details of your car insurance policy include what kind of car you have, your driving record your credit record and the amount of money you are willing to pay. To understand the simple nitty-gritties of car insurance gives you assurance that the car insurance policy you choose will cover your needs.
Understand the Types of Auto Coverage
Everyone car owner needs car insurance. When buying car insurance, you buy a policy. A car insurance policy is a combination of coverage.
Understand the various types of coverage:
• Liability – This coverage pays for accidental bodily injury and property damages to others and include medical expenses, pain and suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs.
• Collision – This coverage pays for damages to your vehicle caused by crash with another vehicle or object.
• Comprehensive – The damages covered by comprehensive insurance include loss caused by fire, wind, hail, flood, vandalism or theft.
• Medical Coverage – Pays medical expenses caused by an auto accident.
• PIP – Personal Injury Protection pays medical expenses for the insured driver for treatment due to an auto accident.
• Uninsured Motorist – Pays for damages to your car when the accident is caused by an uninsured driver.
• Under-insured Motorist – Pays your car’s damages when the accident is caused by a driver with inadequate liability insurance.
• Rental Reimbursement – it will pay for a rental car whilst your damaged car is under repair.
Many insurance policies combine some or all these types of coverage.
Know Your Options
Knowing what you will need is the key to choosing appropriate cover. If another car is available for your use you wont need a rental car. You may want extra cover to pay for parts and labor when your car breaks down. Perhaps you need gap/top-up insurance to pay for the difference between what your insurer pays and what you still owe on finance, if the car is completely totaled.
Some provisions in a car insurance policy are vital, others are purely desired, still others are just pointless.