Car Insurance Basics

Before you apply for auto car insurance rates, learn more about car insurance. We'll explain the basics of a car insurance policy here.

Understanding Your Policy

When you receive your quotes on auto car insurance rates, you will need to compare policies to determine which offer is right for you. To assist you with your decision, we've broken down a car insurance policy into its seven main components.

1. Bodily injury liability - protects you when you kill or injure someone while operating your vehicle. If another party in an accident files a liability lawsuit against you, this coverage will also pay for the costs of your legal defense. When comparing auto car insurance rates, make sure your policy provides enough bodily injury protection to cover a legal judgment against you so your assets are not put in jeopardy. Most states require bodily injury coverage.
2. Personal injury - this coverage might also be referred to as medical payments in your auto car insurance rates quotes. Personal injury protection will cover injuries to you and the passengers in your car. Some auto car insurance rates will also offer coverage if you are injured as a pedestrian.
3. Uninsured driver - covers any injuries you sustain as a result of an uninsured or underinsured driver. Some states allow auto car insurance rates to also cover damages to your vehicle from uninsured/underinsured drivers. With so many uninsured motorists on the road, this coverage is especially important to have.
4. Comprehensive - covers damage to your vehicle not caused by a collision. Comprehensive covers events like theft, vandalism, flood damage, and fire. Selecting a high comprehensive deductible will help keep your auto car insurance rates low.
5. Collision - this coverage pays for damage to your car when your vehicle hits or is hit by another car or object. Again, you will want to choose a deductible that is as high as you can afford to pay out-of-pocket to keep auto car insurance rates low. If you have an older car, this coverage may be unnecessary because of the low cash value of the vehicle.
6. Property damage liability - this is the other type of coverage that most states require. You will be protected if another driver files a lawsuit against you for damage you did to his/her property. When comparing auto car insurance rates, make sure you have enough property damage liability to cover the damage your car might do to another.
7. Rental coverage - rental coverage pays for the costs of a rental car while your car is being replaced or repaired after a covered accident. Rental reimbursement usually has a daily limit of around $25 per day.

Check out our next page for the ten reasons to get car insurance.