Car insurance policies indeed look alike, but if you ever need to use your auto insurance, you want to make sure you have exactly the right coverage. The truth is that not every car insurance company can give you that. Here’s what you need to look for.
Most auto insurance car insurance options are pretty standard, but there can be slight variations in how they work between insurance companies. Here’s what you should consider.
Bodily Injury Liability Coverage
If you cause an accident and hurt someone, they can sue you for their lost wages, medical bills, and other expenses. Your bodily injury liability coverage is what protects you against these claims. Exactly how much coverage you need depends on your income and assets, as well as if you have other coverage like an umbrella policy.
Property Damage Liability Coverage
Property damage liability covers damage you cause to property, whether that’s another car or even a building that you might crash into. When you choose your property damage limits, it’s important to consider what you might crash into, not the value of your car. For example, you might have a $20,000 economy car, but $20,000 won’t be anywhere near enough if you total someone’s brand-new Tesla.
If you crash your car into something else, you need collision coverage to pay for the repairs or replacement. This coverage usually applies regardless of fault, but there can be exclusions for things like drunk driving or reckless driving where you wouldn’t be covered. For newer cars, you may be able to opt into new replacement value coverage. If your new car gets totaled within a certain period, you will get a check for the cost of a new car instead of the current cash value of your car.
Comprehensive coverage is for just about everything else that can happen to your car. This might include hail, falling trees, getting dented in a parking lot and not knowing who did it, theft, and more. Like collision coverage, you may have the option to add new replacement coverage.
Personal Injury Protection
Personal injury protection provides a basic amount of coverage for medical expenses for you and your passengers. The purpose of this coverage is to help you get paid fast without waiting for a liability claim. While there may be some overlap with your health insurance, personal injury protection can often cover things that your health insurance won’t cover, things that are above its limits, or even just your health insurance deductible.
Uninsured and Underinsured Motorist Coverage
As you can see, several auto insurance coverage options cover the other driver. But how are you covered when the other driver doesn’t have insurance? That’s where uninsured and underinsured motorist coverage comes in. Uninsured and underinsured motorist coverage can give you the same protections that your own liability coverages would give to another driver. They apply either when the other driver doesn’t have insurance at all, or their limits aren’t high enough to fully cover your claim.
If you have an auto loan, you may also want to consider gap coverage. Especially for longer loans, it’s possible to owe more than what your car is currently worth. However, if you get into an accident, your insurance company will only pay the value of your car, and you’ll need to immediately pay off the rest of your loan since you no longer have your car. Gap coverage pays off the rest of your loan for you.
How Much Does Car Insurance Cost?
There are so many factors that go into pricing car insurance that two people will rarely get the same quote. It depends on what kind of car you have including the make, model, year, and special options. It also depends on where you live and the rates of crashes and thefts in that area even down to specific neighborhoods. Your driving record also comes into play, including how long you’ve had a license, your claims history, and your moving violations.
On top of all of that, each auto insurance company has their own pricing formula. One insurance company might look at older speeding tickets than another. They may also use different age brackets when determining the risk of individual drivers. Because of this, who is the cheapest or most expensive can change every time you renew your policy as the factors they look at may have changed.
How Are Car Insurance Claims Handled?
The basic idea of car insurance is that if you get into an accident, the auto insurance company will pay for it according to the coverages you have. But how that works can also vary by insurance company. Some insurance companies require you to use specific body shops, while others will allow you to get multiple estimates. Some companies are known for being more aggressive when it comes to negotiating with the other insurance company or going to court, while others will look for a quick settlement.
Getting into an accident is already a stressful experience without having to worry about having to fight your own insurance company. That’s why it’s important to understand a potential insurance company’s claims process and its reputation for customer service.
Talk to Your Insurance Agent
Your insurance agent can help you figure out what coverage you need and which auto insurance company to go with. Cornerstone Insurance Group is located in Zimmerman, MN, and serves the surrounding Minneapolis area. To start your quote or learn more, ask to speak to Chris.