ifydcat After purchasing a new car, your next thought is which auto insurance policy to sign up for. Auto insurance, while sometimes confusing, is a necessity if you plan to own or drive a car on a regular basis. Clearing up some of the complexity surrounding your coverage options can help you to make an educated decision and save money in the process.
When purchasing a policy, it is important to understand the coverage you are signing up for. Some automotive policies will only cover the automobile you hit, and not your own. A liability policy will help to pay for damage to another vehicle and medical expenses incurred by individuals in that vehicle if you are legally responsible for the accident; however, it will not cover your automobile or medical expenses. These policies work well if you own an older vehicle that is fully paid off and would cost very little to replace. In addition, you should have a good health insurance policy that will cover all of your injuries if you are in an accident. Keep in mind that if you are legally responsible for an accident, you can also be held liable for injuries incurred by individuals in your vehicle. A liability only policy might not cover the medical costs for these individuals.
The next thing to understand about an automobile policy is the deductible. The deductible is the amount of money you will have to pay out of pocket before your coverage kicks in. Deductibles can range from about $250 to $1000 or more. The lower your deductible, the higher your monthly premium. Once you have reached your deductible, your insurance policy will cover the rest of your expenses related to the accident up to your policy maximums.
In addition to a comprehensive automobile policy, you might want to consider additional coverage for uninsured motorists or underinsured motorists. An uninsured motorist is one who is not carrying any liability insurance. While illegal in most states, you can still be responsible for the costs incurred in an accident if someone else does not have insurance. You would then need to take them to court to win the possibility of being reimbursed. An underinsured motorist has some insurance, but not enough to cover all of your damages. If you have a policy that covers these types of situations and are in an accident, your insurance policy will make up the difference and prevent you from falling into a financially difficult situation.
A final consideration to make when taking out an insurance policy is extra coverage allowances. Some policies will cover a rental car reimbursement amount, personal items stolen from your car and emergency roadside service calls. These options often cost only a minimal amount, and they can save you time and money if you are in an accident.
There are many things that one should learn about their automobile policy choices. Once you have a basic understanding, choosing the right policy for you becomes easier and less time consuming.
Posted in 
