Why should I understand the basics of auto insurance coverage?


The customers are supposed to be king everywhere. But at times due to their misunderstanding of terms and conditions they are played by the auto insurance companies. They take advantage of heavy legal terms and thus entangle the customers in a web of lies and deceit. For a customer knowledge is power and they need to understand the terms clearly before they sign any documents and buy the policies. Any sort of misunderstanding can be bad for the customers and they will feel dissatisfied with the company. This will also result in bad reputation for the auto insurance company.

There are some points which a customer must find out before signing for the auto insurance. First of all they should know the types of the insurance available. There are many kinds of auto insurance. One is called auto collision insurance. It covers the damage only if you car is in collision with some other vehicle. It does not covers the tires, theft, vandalism or even extreme weather conditions. It is cheaper and does not cause you to pay for hefty premium amounts. One of the auto insurances is called comprehensive auto insurance. It includes the damages done by vandalism and extreme weather conditions too. You can also make it cover for theft charges and tires easily. It costs more premium amount than the auto collision insurance. There is also a third kind of auto insurance. It is called auto liability insurance and it is required by the law of almost every state. It covers your financial responsibility for the damages done by your driving. Every state has its own auto liability limits and when you drive in that state it is assumed that you can pay for the auto liability for that state.

You must also know about the nature of the money involved. There are three kinds of amounts you will be required to acknowledge. One is called the coverage amount; it is the maximum insurance amount the insurance company will be required to pay you. It shouldn’t be too low or too high. Then there is deductible amount which is the minimum amount you will have to pay for your car’s repairs before you can ask the insurance company for money. The premium amount is the amount you pay to the company every month or year and it depends on your coverage amount and deductible amount.