Information on Purchasing Auto Insurance and the many factors and policies involved. Although you don't have a choice about buying auto insurance in many states, you do have some choices about how much you pay and who you choose as your insurance company.
You may have recently experienced an increase in your premium or maybe you just want to check out some other companies but you don't know where to start. The Office of Financial and Insurance Services (OFIS) can help you by giving you the information you need to understand what affects your premium and giving you some tools to help you shop around for a lower premium or for a different insurance company.
Why should I insure my vehicle? Security is one of the most important reasons to purchase insurance. If you are uninsured you may be held liable for all damages that result from an accident while uninsured, including your own.
What auto insurance coverage maybe a good idea to look into to purchasing? Each state has it's own automobile insurance laws and you should be aware of them. That aside, you should consider the following:
Personal Injury Protection (PIP) - Personal injury protection (PIP) pays all necessary medical costs if you are hurt in an auto accident in many states.
Property Protection (PPI) - Property protection (PPI) pays up to $1 million for damage your car does in some states to other people’s property, such as buildings and fences.
Residual Bodily Injury and Property Damage Liability Insurance (BI/PD) - Residual bodily injury and property damage liability (BI/PD) pays your defense costs and any damages you are found liable for as the result of an auto accident, up to the limits of the policy. In some states the minimum limits of coverage that everyone must purchase are $20,000 for a person who is hurt or killed in an accident, $40,000 for each accident if several people are hurt or killed, and up to $10,000 for property damage in another state. These minimum limits are often referred to as 20/40/10. You can also purchase additional limits of BI/PD coverage.
You can learn more about each of these coverage's for your policy by reviewing Consumers Guide specifically addressing automobile insurance issues in your state.
What are some of the extra optional auto insurance coverage's I can buy to make up my policy? Some drivers choose to purchase additional coverage or purchase additional limits of the mandatory coverage's. These additional coverage's. and limits are optional and should be purchased based on your own circumstances.
Physical Damage for Your Car (Collision and Comprehensive) If you want to have your vehicle covered if it is damaged or stolen you must purchase collision and comprehensive coverage. Collision coverage pays to repair or replace your vehicle if it is damaged in an accident and is available with our without a deductible.
Comprehensive coverage pays if your car is stolen, collides with an animal or is accidentally damaged by falling objects, fire, flood, or vandalism. You can purchase both of these coverage's. with deductibles in an effort to reduce the cost of your insurance.
When deciding whether to purchase physical damage coverage on your car, you need to take into account what that coverage would cost in comparison with how much you could actually receive if the car is damaged. You may decide not to buy collision coverage, to buy a lower cost type of collision coverage, or to change the amount of your deductible.
Uninsured Motorists Insurance - Uninsured motorist coverage is an optional coverage that compensates you for pain and suffering and excess wage loss if you are injured in a hit and run accident or if an uninsured motorist strikes you.
Residual Liability Insurance – Increased Limits - Many people choose to purchase increased limits of residual liability insurance coverage. In the event of a serious accident, your liability may be more than the basic liability coverage. To protect yourself, many people buy extra liability coverage (e.g. $50,000 for each person, $100,000 for each accident in which people are hurt or killed and up to $25,000 for property damage). Many other coverage combinations are also available.
Limited Property Damage Liability Insurance – Mini-Tort - Insurance companies also offer “mini-tort” coverage. Under some state laws, if you are 50% or more at fault in an accident, you can be sued for up to $500 in damages to another person’s car that are not covered by collision insurance. Many consumers purchase this additional liability coverage to protect themselves from this specific liability.
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