Auto owners insurance involves a lot of things that can be confusing. You have to be educated and prepared to know these various provisions and definitions if you want to buy insurance. It is simple to just buy what the insurer offers you, but that can be costly in the long run especially when not studied. Take time to learn a little bit about insurance so that you would know what you are getting for your money.
Auto owners insurance is necessary for all states, but some laws make allowances for payment of costs in place of insurance. This is fine, but it is still better to drive with insurance. This is to protect yourself and also to reduce expenses you may incur in case of an accident. Without insurance it would be very difficult to pay for the expenses involved in an accident when you are either broke or facing jail time for not being able to pay expenses.
There are different kinds of insurance coverage. The most common type is the body injury liability. This type of coverage pays for injuries or deaths related to an accident you caused. There is a limit for each person and each accident. For example, if you see in your policy ‘100/300’ that means you would have $100,000 per person for injury per coverage and $300,000 per accident.
Property damage coverage is included in most State laws. This coverage would pay for any property or any other cars that you damage during an accident. This is available in amounts ranging from $5,000 to $1 million in coverage.
Total and collision coverage is another type of auto owners insurance. Total coverage pays for damages that are not directly related to an accident.
Collision coverage means it pays for the repairs of your car and this includes “one-car” accidents or if you happen to hit a tree along a highway. Total and collision coverage are sometimes included in full coverage policies unless otherwise requested.
Insurance quotes are calculated based on predefined factors and one of these factors would be your credit history. If you have a good credit history, like paying your bills on time, then insurance companies would view you as a credit worthy person.
Just like in any other type of business, insurance companies need to earn profit and they would not be too thrilled to insure you if you have poor credit standing. Plus, this may mean a possible sign of an early bankruptcy on your part.
These things will prevent you from getting a bad deal, by knowing what to ask and expect for when looking for auto owners insurance.