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The Basics of Buying Car Insurance

by OnlineInsurance Staff on July 28, 2010

When you’re shopping for an auto insurance policy, the industry terms and jargon can get quite confusing. We’ll talk you through the basics of buying car insurance, and show you how to use online insurance quotes to find the best deal for you.

Car insurance is required for all drivers in most states, and is highly recommended by financial experts. Auto insurance protects you, your assets, and any money you might earn in the future from lawsuits that could arise if you cause an accident. When someone takes you to court over a collision, they can come after you for medical bills, lost wages due to time off work, and pain and suffering. If you don’t have car insurance, you could be gambling with your financial future.

Keeping Costs Down

Car insurance doesn’t have to cost a lot. Your premiums will be higher if you drive an expensive car, especially if it’s a sports model and you’re a younger driver. You can expect to see lower online insurance quotes for older vehicles, cars with safety features like anti-theft devices or air bags, and older drivers. Your insurance rate will also vary depending on where you live, your driving record, insurance score, and even what type of work you do.

Types of Insurance

The two most basic types of car insurance are bodily injury and property damage. Property damage will pay for damage you cause to property. It’s typically another vehicle, but it could be a building or fence, or even a tree. Bodily injury pays costs for other people’s injuries or death when you are responsible for an accident.

Personal injury protection covers your medical bills or funeral costs if you are hurt or killed in an accident. It will also cover these expenses for your passengers or any pedestrians you might hit. Coverage is limited in some states and not offered in others, so be sure to check with your insurance carrier to see if it’s available.

Many people also find it useful to obtain uninsured/underinsured motorist coverage. These benefits pay you in the event you are hit by an uninsured driver or one who doesn’t carry enough insurance to cover your expenses.

Comprehensive and collision insurance are types of auto insurance that are often required by lenders. Comprehensive covers your vehicle and its contents for losses that don’t result from a traffic accident. Most often, this coverage kicks in when fire, theft, or extreme weather damages, or results in loss of, the vehicle.

Collision insurance covers the damages to your car whenever you are in an accident, no matter who is at fault. This benefit pays out the actual cash value of your vehicle, and is usually expected to pay off the loan in the event the car is totaled.

Once you know how much coverage you need, search for online insurance quotes and compare prices and coverage levels before making a decision. Look for discounts and ask your current insurer if they will match the rates.

Photo via cyanopolis

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