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Choosing Auto Insurance Coverage

Choosing auto insurance coverage is one of the most important financial exercises consumers make each year. Which auto insurance company to go with, and what specific coverage to include or what to leave out in a policy, are choices that can impact a driver in unexpected ways if a claim ever comes up. Thus it is extremely important to get the decision right the first time and not have buyer's remorse later on down the road.

As auto insurance policy holders begin the process of shopping for coverage, they very quickly find that there are many sometimes complex choices to make. For the average consumer, some of these choices may be quite difficult. An auto policy has a lot of complexity to it, but its basic tenets can be understood if we just take the time to work through and study up a bit. It is in the best interests of policy holders to take this time, so that they do not end up overbuying for covering they do not really need, or come out with insufficient protection when they really need it. A correct understanding of the function of each part of a policy is necessary if we are to make wise choices with regard to coverage.

Understand Your Auto Insurance Plan

To save themselves from spending too much money on their coverage or being talked into protection they really don't need and cannot afford, motorists need to understand their auto policy in all of its facets. Take the time to get to know each area of a policy, and learn how each part works and exactly what it accomplishes for you as a driver and an auto owner. Do some research into the different options beyond what is required in your home state. Find out where to go to learn more; there are numerous informative resources online that give definitions and explanations for these terms, helping anyone outside the industry to understand car insurance a little better and make wiser policy choices. This website is one such resource. A good place to start may be the insurance department site for the state in which you live.

Most drivers are somewhat surprised the first time they really stop and consider how minimal their home state's insurance requirements really are. These requirements do vary from state to state, but they generally fall well short of industry recommendations. Therefore it is important to first find out what is required, and then decide whether just that minimal policy is enough to protect you in claim situations. Liability is a very pertinent example. Liability property damage insurance requirements in most states are not even high enough to replace a new car, much less deal with other property damage or pay for damage to multiple vehicles. For this reason, many drivers carry much higher liability levels than the minimums required by their home states. The insurance industry also recommends these higher levels, citing civil court cases statistics to bear out its claim that minimum policies are insufficient in most cases.

Choices Available in Your Policy

Aside from carrying higher limits of coverage than what are required by your state, you have many other choices when it comes to your auto insurance. In many states, only liability coverage is required by law; in others, extras like no fault or uninsured motorist protection are also compulsory. Regardless of what your state mandates, there are always extra areas of protection worth exploring. Drivers who have a loan on their vehicles or who lease their cars will need to include comprehensive and collision on their vehicles. Other drivers may want to look at optional endorsements like towing coverage. There are a host of options which can vary from state to state or company to company. And that brings us to the next big choice for auto owners: the selection of the insurance company to work with.

In every state, there are many licensed car insurers. The number these days in most states is even bigger than in years gone by thanks to the online market bringing new companies into territories or spreading out the area that companies now cover. Choosing the right auto insurance company is every bit as important as choosing the right combination of coverage. After all, the protection you pay for is only as good as the company backing it. If you cannot count on your insurer to keep their promises, you can't trust your insurance and there is no peace of mind with the coverage you pay for with your hard earned money.

But if you find a good fit with a company you can trust, chances are good that you'll have a positive working relationship. Take your time selecting a provider and take more than just price into consideration.


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