A great many people are in the dark as to what auto insurance is all about.
How are car insurance premiums established? Why are they going up? Can they be kept down? What do all those words in the policy mean?
Let us assume you need auto insurance and head for your local independent agent – a businessman who represents up to 20 different insurance companies. The first, most basic question he will have in determining which company is best for you is what type of coverage you want or need - and what amount. Here are the types of coverage’s:Liability coverage: an automobile in operation can cause injury. Because this can happen any time you get behind the wheel of your car, liability car insurance is the most important type of auto insurance you carry. It protects you and your family against claims and judgments for damage or injury caused by the vehicle. Keep in mind that this does not cover your car, but, by covering damages or injuries which might have been caused by you, can protect you financially from far greater losses than you could possibly suffer through damage to your own vehicle.
Within specified limits, this type of insurance protects you and your family in almost any car you drive and even protects people who have borrowed your car. The most important thing to remember is that liability insurance should be broad enough in scope to cover of appeal bonds, bail bonds and bonds to release any attachments on your assets.
Medical payments coverage: within specified limits, this insurance covers the costs of any medical expenses incurred by you or any relative living with you for any auto accidents even if you or they are pedestrians. It also covers any medical expenses of a guest in your car or another victim in the accident.
Collision coverage: This protects you car if it is involved in an accident, irrespective of who is to blame. With this coverage you are covered for the full amount of the damage to your car less the deductible amount.
Comprehensive coverage: this insures your car against almost all losses, except for those involving collision. It covers loss or damage from things like fire, theft, vandalism and storms.
Now that we have outlined the types of auto insurance coverage’s that are available, we can go into the factors that go into each and which, in the final analysis, will determine just how much your insurance premium will be.