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Other articles in Insurance > Automotive
7 Ways to Save Money on Automobile Insurance 25 February 2009
Tips On Making Your Auto Insurance Claim after a Car Accident 18 February 2009
Practical Tips on Getting an Auto Insurance 18 February 2009
| Read Before You Buy: What’s Covered On Your Auto Policy |
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| Insurance > Automotive |
| Written by Lilly Chandler |
| Tuesday, 27 January 2009 05:35 |
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You get what you pay for. Keep that in mind the next time you are shopping for car insurance. Less doesn’t always mean more, and the bargain may leave you short handed when you need to file a claim. Bottom line is the final price isn’t the only thing you should look at when switching or purchasing insurance for the first time. Let’s start with the basics, what every driver must have to be on the road (if insurance is required in your state). Liability coverage. This means Property Damage and Bodily Injury Coverage. This is what is referred to as a third party coverage. It covers the people you damage or injure in an accident. How much should you carry? Depends on how protected you need to be. College student with no assets? 15/30/10 should suffice. Homeowner with tangible assets? Protect your home and your bank account and consider 100/300/100. When you’re in an accident and the amount of damage you cause exceeds your policy limits, lawyers can run asset checks to see what you have and what they can take. Did you total a brand new Mercedes? Better to carry higher limits than to have your house taken from you. Next thing most people care about is collision and comprehensive coverage. This covers your vehicle in case of an accident or loss. In most cases, the average policy holder carries a $100 comprehensive deductible and a $500 collision deductible. One important fact to remember, these deductibles apply regardless of fault. If you can’t afford your deductible, what good is it to have the coverage? While lowering your deductibles does increase your premiums, being able to get your car repaired without emptying your savings is a useful tool. Other coverages you might see (and might be helpful), are Med Pay (Medical Payments), towing and labor, rental car and uninsured motorist coverage. Med Pay is great if you don’t have health insurance, but it also protects your passengers who may not be insured to seek medical attention. Med Pay can be used regardless of fault and applies to anyone in your vehicle. There is usually a limit associated, and in some cases two types of coverage—ask a professional agent or broker which is best for you. Towing and labor in my opinion is unnecessary. I carry a AAA membership for any roadside emergencies, and most cell phone companies now offer a roadside assistance plan for a minimal monthly fee. Rental is great, and here’s why. If you own one vehicle and your car is hit while parked and unoccupied, the shop may need to keep it for a few days. Chances are you’d like to go to work or get to the grocery store. Add the rental coverage. It’s very inexpensive, and unless you’re looking to rent a mustang convertible, $30/day will get you into a full sized car with no out of pocket expense (except gas). Last is the ever dreaded uninsured motorist coverage. Yes, you should carry this. Like it or not, even though insurance is required in most states, there are still a lot of people who don’t carry it, or let their policy lapse. If you are seriously injured by one of them, your policy will actually pick up your injury settlement, since there is no liability coverage to draw from. If your car is damaged and the other party is uninsured, most insurance companies offer a deductible waiver that covers your deductible and all damages to your vehicle. Bottom line, better safe than sorry. Hopefully this has given you some insight as to what the fine print is about. Best advice I can give you when shopping for insurance—don’t buy your policy online. Go to an insurance professional who can explain the policy and what you’re paying for. Most of the time they can save you money on coverages you need, and they can also keep you from being underinsured. And since most of us don’t take the time to read that terribly small printed policy they send us, a little extra help never hurt anyone. |
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