Tips For Finding The Best Car Insurance For You

By Author: Jc Denton
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Understand the Different Types of Car Insurance

The first question to ask when investigating car insurance policies is what level of coverage you really need. Given the current recession, many drivers are opting to drop their coverage from higher levels to the lowest levels to save money †is this the right choice for you?

Unless you live in New Hampshire or Wisconsin, you are required by law to have the most basic level of car insurance, which is known as “liability insurance”. Liability insurance covers your own mistakes, such as any bodily or property damage you might do when you accidentally back into another car, or rear-end someone because you were reaching for your cell phone. How much the liability insurance will pay out will depend upon your individual policy.

However, liability doesn't cover you if someone else rear-ends you because they were reaching for their own cell phone; in that case, how much money you get from the other guy's car insurance company depends upon their level of insurance.

If having only liability insurance makes you nervous, ...
... the next policy up is called “collision insurance”. As the name implies, it covers damages caused to your car should you get into any kind of collision with another car or another object. More expensive still is “comprehensive insurance”. Comprehensive insurance pays for any kind of damage done to your vehicle, including damages from hail, wind, water, fire, vandalism, or theft.

Other types of policies you can add on to your car insurance coverage include personal injury protection, rental car reimbursement, roadside assistance, uninsured motorist insurance, and medical coverage.

Ask Yourself What Level of Car Insurance is Right for You

It's tempting to think that nothing bad will ever happen to you or your car, but just because we have a good driving record or have had good luck with vehicles we've owned doesn't mean that our luck will hold out indefinitely. While some people are tempted by the price tag to get the lowest level of car insurance (liability), that doesn't necessarily mean that level of coverage is right for you.

First, ask yourself, “If I totaled my car today, could I afford to replace it?” If the answer is no, then you might need more than just liability. On the other hand, if you are no longer making a car payment, your car is older, and has a lot of mileage on it, is the extra cost associated with comprehensive insurance really necessary? A good rule of thumb is to look up the Kelley Blue Book Value of your car. If your vehicle is worth $2,000 or less, then the cost of comprehensive insurance is probably not worth it.

Furthermore, although many people do not realize it, other kinds of insurance, including homeowner's insurance and medical insurance, will cover certain costs that are typically associated with car insurance. A little research into your other insurance policies may reveal that you don't need as much car insurance as you thought.

Check an Insurance Company's Reputation Before Taking Out a Policy

Car insurance companies are just like any other company: there are good ones, and there are bad ones. The good ones are generally more expensive, but you can count on them to be there when you really need it. But again, if your primary goal in your car insurance is to save money, then a less reputable company that offers you a lower rate on that old clunker of yours might be a better choice. Take a look at car insurance ratings, such as those available from JDPower.com. Knowing how companies are rated can give you added peace of mind when you make your policy purchase.

Once you understand the different types of car insurance policies, determine which level of car insurance is right for you, and check out the different rating levels of car insurance companies, you will be ready to find the best car insurance policy for your own situation.
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