Auto insurance can be confusing. There are so many different types of coverage, basic requirements for each state, and monthly costs associated with everything. If you are not careful, you can end up with either more or less insurance than you need for a price you cannot afford. What do you really need?
The first thing to know about auto insurance is that the coverage you need really depends on your situation. Most states require drivers to have auto insurance before they will allow them to register a vehicle. To find out the basic requirements in your home state, click here. In addition to minimum requirements by state officials, many banks and credit unions have their own requirements. If you have a car loan you will need to ask your lender what their requirements for insurance are.
Once you understand the basics of what you need in a car insurance, you are in a position to learn about what those things really mean.
The main requirement for car insurance in most states is liability insurance. Liability covers your legal obligation to others both medically as well any property of theirs that you may have damaged. These two types of liability are often discussed separately as bodily injury liability and property damage liability. When you look at insurance information, you will often see three numbers divided by slashes such as 10/50/15.
The first two numbers explain the monetary coverage for the bodily injury liability.
The first number in our example, 10, which stands for $10,000, is the total amount that will be supplied per single individual should someone be injured in an accident. So for this example, if someone went to the hospital with whip lash and needed to see a doctor, the driver of the vehicle's insurance would pay up to $10,000 for that treatment.
The second number is the total, 50, which stands for $50,000, is the total amount of bodily injury liability that will be supplied for everyone injured in a single accident. If everyone in an accident suffered from whip lash, chances are that $50,000 would cover their injuries. However, depending on the severity of an accident, $50,000 may not be able to cover everyone's medical expenses. This is why some insurance agents or car loan lenders may require or suggest that you purchase more than just the state minimum requirement for insurance.
The third number in the aforementioned slashed numbers is the property damage liability. This is the amount of money that your insurance will cover should you cause injury to someone else's property. For example, let's say you rear end someone and they need to get their bumper replaced. If you have the insurance from this example, your insurance would cover the other driver's vehicle up to $15,000.
Contact an auto insurance service for more help.
After we had kids, we realized that we needed to up the ante on our insurance coverage. While we had a policy in place, I knew that we had to do something to make sure that we were protected in any instance, which wasn't the case at the time. I began talking with different brokers about what we could do to improve our coverage, and they had some really great suggestions that seemed to help. This website is here to help other people to know how to purchase insurance, and what kinds of policies would work best for your special family.