Car Insurance Help Guide

We know that getting the right kind of car insurance help can be confusing. That is why we've put together this guide to explain the basics of a car insurance policy.

Types of Coverages

Though policies vary by company and policyholder, car insurance help can usually be broken down into several primary coverages. Here are the types of coverages that comprise a typical policy and an explanation of each.

• Property damage liability. This coverage pays for the damage you do to another person's car or property in a collision. Be careful to select adequate property damage liability coverage, as most state-imposed minimums are grossly insufficient. The rule of thumb with this coverage is to carry about $50,000-$100,000 for each car you insure.
• Bodily injury liability. This coverage will pay for the injuries to your own passengers as well as those of the other driver and his/her passengers. When shopping for car insurance help, don't try to scrimp on this coverage because the main purpose of it is to protect you against a lawsuit by another person in the accident. If you have any valuable assets, a judgment against you could put them in jeopardy. Below is a car insurance help guide:
  • If you make $30,000 and rent: Basic $50,000/$100,000 coverage will do.
  • If you make over $75,000 & own a home: Get at least $100,000/$300,000 coverage.
  • If you have substantial income or assets: Get the maximum bodily injury coverage and supplement it with an umbrella policy.
• Uninsured or underinsured motorist coverage. If you are hit by a driver with insufficient or no insurance, this coverage will pay for your medical and/or funeral costs. This coverage is designed to add to your current medical insurance protection. It will usually also cover accidents with pedestrians or bicyclists.
• Personal injury protection. If you have adequate health, life, and disability insurance policies, you could probably omit this coverage altogether. This coverage will may for medical and funeral costs for you and your family if you are in an accident, regardless of fault. Ask your agent if you need this coverage when looking for car insurance help.
• Comprehensive and collision. Comprehensive coverage takes care of any damage to your car that does not happen in an accident. Covered events usually include weather damage, vandalism, theft, fire, etc. Collision coverage will pay to replace or repair your vehicle following a collision. If your car is older and has little or no cash value, you might consider dropping collision coverage from your policy. Usually, insurance companies will only reimburse you for the present cash value of the car. To find out how to save money on your car insurance, see our How to Keep Premiums Low page.