There are many talks about comparing your auto insurance quotes for saving money. While most people find it easy to compare the premium price, it is often very difficult to compare the actual coverage. If you are feeling frustrated because you are having this problem, this article may help to shed some light on the subject. Understanding what to compare in insurance quotes helps you choose the right policy
The first rule is ‘Apples to Apples’. Understanding the policy’s language will help you know if you are comparing the same things. Start with Liability insurance. Simply put liability is your financial obligation to cover damages to persons or property in the event of an accident. Very few people put aside money to cover the costs of what if’s, and even fewer have the resources to cover the total costs of an accident. The government requires you buy insurance. (Otherwise they would be footing the bill for medical and many property damages created by auto accidents).
Liability coverage has two components: personal injury and property damage. When you read the numbers like:
Bodily injury Liability : $50,000/ $100,000
Property Damage Liability: $25,000
This means the limit and individual will be paid for bodily injury or death in a single accident is $50,000 and the maximum to be paid out for an accident is $100,000. Furthermore, the maximum amount to pay out for property damage is $25,000. This is probably the lowest limit your state will allow. Be advised that if you at fault and the property damages or the bodily injury damages are higher than the amount of auto insurance coverage you bought, your personal assets will be used to cover the costs.
Next examine the comprehensive verses collision. These two types of coverage are optional. Collision is limited to collisions, your car hitting and object or another car and you are responsible. Collision pays for repair and possibly towing, minus your deductible up to the true value of the car. (The true value is the depreciated or market value not what you owe on any loans or what it is worth to you.) It does not pay for damages that occur as the result of someone else. Comprehensive covers extras like acts of God including hailstorm, flooding, falling objects as well as riot, collisions with animals, fire, theft, and vandalism.
The general rule is you must know what you need when checking auto insurance quotes from multiple insurance companies.