czwartek, 29 listopada 2007

Auto Insurance

An auto insurance policy is a contract between you and an insurance company. You pay a premium, and in exchange, the insurance company promises to pay for specific car-related financial losses during the term of the policy.

Why do I need auto insurance?
In some states, to drive you must carry:
Liability coverage to pay for losses you cause others, or:
No-fault coverage to pay you and your passengers for medical and related expenses caused by injuries from a car accident, regardless of fault, or both coverages.

Even in states where auto insurance coverage isn't required, drivers must, by law, be able to pay for losses they may cause others. Having auto insurance is the simplest way for most people to comply. Also, coverage for vehicle damage usually is necessary to finance a car.

Without insurance, you risk paying for the full cost of:
Any harm you cause others, or:
Repairing or replacing your car if it's damaged or stolen.

How much auto insurance do I need?
Questions to ask yourself and your auto insurance agent:

How high should my liability coverage limits be? No one can predict exactly how much you would have to pay if you were to cause an accident. Ask yourself how you would pay for any damages exceeding your coverage limits. The higher your limits are, the more likely your policy will be able to pay all of the damages.

How high or low should my collision and comprehensive deductibles be? Higher deductibles lower your premium but increase the amount you must pay out of your own pocket if a loss occurs. Ask yourself how much you are willing to pay in order to save on premium.

Should I carry collision and comprehensive coverage? As your car's value decreases, you might consider dropping these coverages and pocketing the savings on premiums. Consider, though, if the savings are enough to offset the risk of footing the entire cost of repairing or replacing the vehicle.

In every state except New Hampshire, South Carolina, Virginia, Wisconsin and Tennessee, you will be required to carry at least a minimal amount of liability insurance. Liability insurance protects people in other cars when you are at fault, covering medical bills and car repair. However, this very basic type of insurance does not cover injuries to you or damage to your own vehicle. To get this coverage, you’ll need comprehensive and/or collision insurance. You’ll find that auto insurance quotes for this type of coverage are higher than those for liability insurance; that’s because these cover so much more. Collision insurance pays to fix your car and pay your medical bills even if you are at fault in an accident. Comprehensive insurance covers most other things that can happen to your car – fire, vandalism, or random events like falling tree branches. Depending on your personal circumstances, you can choose different deductibles which will change the estimated yearly cost of collision and comprehensive auto insurance quotes. A deductible is the dollar amount that you must pay before your insurance kicks in. For example, if you have a $500.00 deductible and your car incurs $350 in damage, you’ll have to pay to cover the whole amount. But if you incur $800 worth of damage, you will pay $500 of that amount and your insurance company will pay $300. Some auto insurance
companies also sell medical payment and personal injury protection (PIP)/no-fault insurance, which expand medical coverage and may pay for lost wages, childcare costs, and other side expenses resulting from accidents. Other add-ons can include rental reimbursement and towing and labor insurance. When offering you an auto insurance quote, companies will want to know about your driving records, your age and how long you’ve had a license, and will inspect your car before certifying it.

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