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A Guide To Buying Car Insurance

Car Insurance
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Buying car insurance is the kind of thing that most consumers can do well if they take the time to learn a little bit about auto insurance policies. Understanding what's in a policy and what causes policy prices to rise or fall can help with the process of buying auto insurance. Consider the following guide when your situation calls for buying car insurance.

How Much is Enough Car Insurance?

  • Liability insurance. The amount of liability insurance you choose dictates how much coverage is in the policy. There are laws in all but two states that require motorists buying auto insurance to buy at least a minimum level of liability insurance. But insurance experts say those amounts are far too low, and although they may save you money, liability limits should be at least $100,000/$300,000/$100,000. That's $100,000 for a single injury in an accident, $300,000 for all injuries and $100,000 to pay for property damage. That's 3 to 5 times more than most state minimums. Remember that if you are at fault in a serious accident, the people you injure can sue you personally if there isn't enough coverage in your auto policy to pay for damages.
  • Some coverage is optional. The two other portions of most insurance policies are collision and comprehensive coverage. Collision pays for damage caused by an auto accident. Comprehensive pays for damage caused in other ways, such as vandalism, fire or flooding. If your vehicle is older and has lost much of its value, you can cancel either coverage when buying car insurance to save money.

Ways to Control Costs When Buying Car Insurance

  • Compare several policy quotes. Comparison shopping is the way to go when buying car insurance. If you get quotes from several different companies, you can see who offers the best deal and you may spot a savings in one policy not include in another that you can inquire about. Be sure, however, to provide identical information to all insurance companies to make sure the comparisons are fair.
  • Deductibles. The deductible is the amount of money the policyholder agrees to pay first, in the event of an insurance claim, before the insurance company pays the rest. Deductibles set at the highest levels - $1,000 or $1,500 - can save up to 40 percent of the policy cost. But drivers should think long and hard, particularly if they tend to be involved in lots of insurance claims. If you cannot afford the deductible, it doesn't matter that higher levels mean lower insurance costs.
  • Discounts. If you have any questions about what discounts are credited in your policy when buying car insurance, contact the company and specifically ask about a particular discount. There are quite a few offered by most companies, although the savings usually varies from company to company. Some common discounts include savings for multiple insurance policies, car safety features, low mileage, safe vehicles, driver safety courses and a safe driving record.

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