What To Look For In An Auto Insurance Company

By John Hasson, Jr.

Since almost all the states require that you have auto insurance, the question should not be whether you want it, but what you want your policy to cover. Indeed there are many decisions, but they do not have to be difficult ones to make if you know what you are looking for. Once you know what you want, then it will be much easier to find a company that can give you that for the lowest price.

How To Decide What You Want

You must decide what all your personal needs are such as a teenager in the house who also drives, but needs to be covered as well. Then make sure the policy will cover everything on the list.

How Much Liability Coverage Should I Get?

You also must decide how much liability coverage you want (paying for damages that you cause to another person on the road). There are two parts to liability coverage: bodily injury and property damage to the other person. Since liability insurance is the main reason to get insured in the first place, it is strongly recommended that insurers insure themselves well above the minimum requirement of the state. It is a good idea, in this area, to go as high as you feel you can because if you are unable to pay all the damage costs, first your assets will probably go to help pay for it, then you will just be in mounds of debt. You could get lucky and maybe they would have insurance for the underinsured (you) and maybe their attorney wouldn't go after you, but don't count on it.

How Much Collision Coverage, If Any, Should I Get?

One should assess the value of one's car first before deciding on collision insurance. Is your car old anyway and on its last leg, or is it brand new? How much are you willing to pay out of pocket should anything happen? If your car was totaled, would you rather pay out of pocket and/or risk your insurance going up, or would you rather just buy a new car? You should only get collision coverage if you feel a need to keep your car and repairs from such an event would be much more than staying insured, thus requiring the help of your insurance. It is important to note that collision insurance will insure no matter who is at fault, generally.

What Other Types Of Coverage Should I Consider?

Comprehensive auto insurance means exactly that, it is all comprehensive (it includes just about everything else that could go wrong with your car). For example, if your AC broke, it could cover repairs for that, or if your car got stolen it would cover for that as well. It will also (typically) cover for extended medical expenses of anyone injured in the accident, salary lost during that time, and funeral expenses. That is the one thing about life, full of endless possibilities, so if any of these coverages are important to you, then you should get the comprehensive coverage plan.

How High Should My Deductible Be?

Your deductible is how much you must pay out of pocket before your insurance will help you. The higher your deductible, the lower your monthly payments (your premium). So, if you are not very accident prone, perhaps a high deductible would be good for you, as high as you feel that you could pay yourself. If you are still struggling with what you want your deductible to be, think of this scenario: You get in a fender bender by running into the friendly pole over by your gas station, and it is $500 to fix. Would you rather pay out of pocket? Or go through your insurance risking that your rates will increase. How about if it was $1000 to fix? Now how about $1500 to fix? Now $2000 to fix? The highest number you would want to pay out of pocket for should be your deductible. 

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