Thursday, March 7, 2013

Automobile Insurance - The Liability, Comprehensive, Collision Quagmire

Knowing what auto insurance you are required to have is easy. Ask any insurance agent or look it up on your state's insurance commissioner website. However, knowing what insurance coverage you should carry is much murkier; it can be a real quagmire for many people. Everyone needs to have car insurance because it is the law; this law makes sure that everyone is financially responsible for any mistakes they make while driving. Driving is not a right, it is privilege, and insurance coverage is something you must maintain to continue to enjoy that privilege.

Liability Coverage

Liability coverage is the one type that is mandated by law. Liability insurance covers injuries to other people and their property up to a specified limit. If you are in an accident and determined to be at fault, liability coverage will pay medical expenses for any injuries suffered by others and for any repairs needed to the other driver's vehicle.

Collision Coverage

Collision insurance is not mandated by law, but is an important type of coverage for many drivers. This type of insurance will cover the driver's vehicle in the event of an accident that is determined to be the driver's fault. The driver will then pay the selected deductible and the rest is paid by the insurance company. Collision is often required if you are leasing or financing a vehicle. Drivers who own an older car that is paid in full, may consider dropping collision coverage because the insurance benefit is limited to the cash value of your car.

Comprehensive Coverage

Like collision coverage, comprehensive insurance is not mandated by law and is up to the discretion of the automobile owner. Comprehensive insurance covers most everything other than collision damages. This damages include fire, theft, vandalism, hail, and many others. Just like collision coverage, if you have a newer car, it is a good decision to carry comprehensive coverage, but as your car gets older and decreases in value, it may be time to consider dropping this type of coverage.

Other Types of Coverages

Most insurance carriers, for an additional fee, offer a few different types of insurance. The two most common ones are towing and rental. With towing coverage, you can have your vehicle towed to a repair shop or your house in case of a breakdown. With rental coverage, your insurance company will pay for you to have a rental car while your vehicle is being repaired.

Paying insurance is not a pleasurable experience for most people. However, it is mandated by law and essential in case of an accident. Insurance companies have made it easier than ever to pay your bill. It can be paid in one lump sum or monthly. It can be paid online, in person, or through the mail. With good driver discounts and fierce competition in the industry, there are reasonable rates available for most drivers. Car insurance can be a real quagmire, but the more you know, the less likely you will make the wrong decision.


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