4 Rules of Thumb for Understanding Auto Insurance

Many individuals don’t fully understand  their auto insurance policy, which can leave them exposed to significant financial problems in the event of an accident. Searching for the ideal insurance company and policy for you and your unique financial situation can be an overwhelming task.

However, it is a very important undertaking, as auto insurance is mandatory in nearly all states. It can also be the difference between financial hardship and a minor inconvenience if you are ever in an accident.

The following four rules of thumb can help you simplify the process and gain a better understanding of auto insurance.

#1 Know the Standard Types of Auto Insurance Coverage

While many take it for granted, auto insurance is a contract between you and your insurance company. In exchange for paying a premium, your insurance company is committing to pay for losses as defined in the policy you select.

Understanding your options for insurance coverage is important when you are purchasing a new car or shopping around for insurance. Auto insurance covers a variety of issues that can occur on or off the road, and coverages vary by state. However, these are the standard coverages on most policies:

Liability

Auto liability coverage is required in 49 states. Liability coverage can pay for damage to other vehicles, damage to objects, injuries to other drivers and their passengers, and lawsuits, if you’re sued due to an accident.

Comprehensive

Comprehensive coverage is important for vehicle damage due to fire, vandalism, theft, and other events that are out of your control. If you have an auto loan or lease, your lender may require this coverage, though it is optional in all states.

Collision

Collision coverage is optional in every state and covers your vehicle if it overturns or collides with another vehicle or stationary object.

Medical Payments/Personal Injury Protection

Personal injury protection is a broader coverage that is available only in certain states that require it, while medical payment coverage is available in most states. These coverages help pay for medical bills if you or your passengers are injured in a car accident in which you are at fault.

Uninsured and Underinsured Motorist

As the name implies, uninsured or underinsured motorist coverage pays for your loss if a driver with little or no insurance coverage hits you.

#2 Know What Auto Insurance Does Not Cover

A basic auto insurance policy won’t cover typical wear and tear, mechanical failures, or routine maintenance. For example, oil changes or replacement of sensors on your vehicle are not covered by auto insurance. You may choose to add a warranty to the purchase of your vehicle, which may cover such maintenance needs.

Auto insurance will likewise not cover any items or belongings stolen from your vehicle. Standard policies only cover injury to you, your passengers, or the vehicle itself.

#3 Know How Much Auto Insurance Costs

The price of auto insurance will vary between insurers depending on the types and amounts of coverage and deductibles you choose, along with several other factors. One such factor impacting rates is decided by where you happen to live. For example, it typically costs more to insure a vehicle in areas with higher rates of theft or accidents. The cost of auto insurance is also impacted by gender, driving record, and the value of your vehicle, among other factors that vary by state.

#4 Know Where to Get the Best Auto Insurance for Your Needs

There are a few different avenues for selecting the best auto insurance policy. The option that is best for you depends on your personal preferences, but there are helpful ways to approach your search.

Sure, you could begin by contacting individual insurance companies and comparing rates. Rates and policies can vary significantly by insurance company, so you’d want to get multiple quotes, which can be extremely daunting and time consuming.

Why spend all that time and energy yourself when the trusted and experienced agents at GWK Insurance can do the work for you and get you the best possible quotes?

Shop the Best Auto Insurance for You

Having reliable and proper insurance coverage is an important component of auto ownership. Finding the best auto insurance policy can save you money, frustration, time, and regret. The first step is choosing an agency you can trust.

At GWK Insurance, we know shopping for auto insurance can feel overwhelming, and we are here to help you select and purchase the best auto insurance policy for your protection. Contact us today to help you find the best auto insurance for your needs.