Understanding your auto insurance policy

 

Your premium is the amount of money you have to pay to keep your coverage active.Every person who drives needs to secure car insurance. Simply purchasing a policy isn't enough though, as you'll want to understand the in's and out's of your plan. So, when you're browsing online insurance quotes, you should be sure you know the following aspects of a policy:

Deductible

Your deductible is the amount of money you have to pay before coverage kicks in. For example, if you have a deductible of $500, your repairs will be covered after this sum is provided to your insurance company. The higher your deductible, the lower your monthly premium will be.

Premium

Your premium is the amount of money you have to pay to keep your coverage active. One option is to pay the full amount upfront, which can lead to savings. If that isn't possible for you, premiums can also be paid in monthly installments. However, if you choose this option, it is important to understand that you may pay more. The higher your premium, the lower your deductible will be.

Bodily injury liability

This type of coverage is required when you purchase an auto insurance policy. It is used to financially protect you or a covered driver from injuries caused to someone else. For example, if you are at fault in an accident, and the other driver gets hurt, bodily injury liability can help cover that person's medical expenses.

Property damage liability

Much like bodily injury liability coverage, property damage liability is required. If you are in an accident, this part of your insurance can help cover costs for damage to another person's property, including a car, telephone pole, fence, or other structure.

Collision

This coverage option isn't required, but if you purchase it, you'll have protection against damage resulting from a collision with another vehicle or object. You should speak with your insurance agent about this coverage as there are certain situations where it may not be recommended.

Comprehensive

Many people think of car insurance as coverage that only protects you in the event of an accident. But, it is much more than that. Comprehensive is an optional coverage that financially protects you in the event of theft, vandalism, or non-collision damage, such as flood and fire. This could be a smart coverage option in areas that are prone to crime and natural disasters.

Uninsured motorist coverage

Another optional coverage, uninsured motorist coverage can protect against injuries sustained by you, a member of your family, or a designated driver if you're in an accident with a driver that is either uninsured or underinsured. This can also be used if you are the victim of a hit-and-run accident, and the driver is not caught.

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This article is intended for informational purposes only. It contains general information and does not replace or modify the definitions and information contained in your insurance contract, policy, or declaration page.
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