Auto insurance

Purchasing auto insurance can be quite a painful task. However, understanding your auto insurance terms and terminology will help you negotiate better terms and save money on your next auto insurance purchase. This site will give you the necessary tips and information to achieve that goal.

• Collision Coverage will cover you in the event you need repairs or replacements if your car collides with another vehicle or property even if it is your fault. Comprehensive Coverage is the coverage that pays for damages to your own insured car, caused from falling objects, fire, theft and vandalism. Certain natural disasters like earthquakes or floods may also be covered.

• Liability coverage will kick in and pay for damages that you caused with your insured vehicle to a third party. Your liability coverage should include bodily injury (people) and property damages, either to public or private property. You don't want to go without Bodily Injury Coverage. If you were at fault in an accident and others involved needed to be hospitalized and/or lost income from missing work, those costs would come out of your pocket if you are not insured with Bodily Injury Coverage. These amounts can add up very quickly. In many states Bodily Injury Coverage are mandatory. You wouldn't want to be caught without Property Damage insurance should you need to pay for repairs to another vehicle, building, street light or anything else you might hit. Both types of coverage can also be handy in the event the other party takes legal action against you.

• The deductible is the amount you pay yourself for damages and repairs to either your car or a third party property, before your auto insurance company covers the rest. Each of the coverages mentioned above has a separate deductible amount that you have to decide upon.

Now that you know the terminology, here are few things that you need to carefully consider:

• Make sure you are covered up to a reasonable amount. If your coverage for each item mentioned above is too low, in case of an accident, you might have to pay money out of your own pocket to cover damages above the insured limits. On the other hand, too high, unreasonable coverage will raise your insurance costs with actually little or no benefit to you.

• Raise your deductible. Many people choose small $100 - $250 deductibles, to minimize their out of the pocket expenses in a case of an accident. However, the smaller the deductibles, the higher the insurance costs and on top of that, making an insurance claim will raise your insurance rates in the following year. So you will be better off paying for small damages yourself. Raising your deductible to $500 or $1000 will often dramatically reduce your auto insurance rates.

• Consolidate your policies. Most auto insurance companies will provide a discount to you insure more property with them. Insure a second car as well as your home or other vehicle (boat, motorcycle, etc.), and claim your discount.

• Be sure to shop around before closing. Auto insurance companies vary their rates dramatically, even for drivers with good records. Try to get and compare quotes from at least 3-4 insurance companies. You will be surprised by the differences of hundreds of dollars between the rates they quote you for the same auto insurance.

  Every policy will have its limits and various degrees of coverage. It's important that you understand the basics of what you are paying for and why it is necessary. No one plans for an accident, but it's better to be prepared!