Everyone who drives a car needs auto insurance. That’s why there are a number of choices and so many industry giants. But with all of those options available, you may ask, “are all auto insurance policies the same?” The answer is no; there can be significant differences from one car insurance policy to the next. Some of these differences can work to your advantage if you know what to look for when choosing an insurance provider. Let’s take a look at how you can benefit from knowing what makes one policy superior to another.
The Basics of Automobile Insurance
Before we delve into coverage, you should be aware of the automobile insurance basics.
Liability Insurance
Liability insurance covers you if you are in a car accident and the accident is your fault. This insurance will cover the cost of repairing any damage caused by your accident as well as any medical bills from injuries. Most states have a minimum amount of liability insurance coverage required. It is usually wise to have liability insurance over your state’s minimum liability coverage requirement. The liability insurance gives you extra protection if you’re at fault for an accident.
Collision Coverage
If you are in an accident, collision coverage will pay for the repairs to your car. If your vehicle is totaled, and it cost more to repair the car than its value, collision coverage will pay the list value of your car.
Comprehensive Coverage
When something happens to your car outside of your standard coverage, like storm damage, colliding with an animal, or your car being stolen; comprehensive insurance coverage will cover the cost. Liability insurance and collision coverage cover accidents, but not the previously listed examples, comprehensive coverage will cover them.
Personal Injury Coverage
While Comprehensive coverage may be something may want in your policy, Personal Injury Protection (PIP) is something you should have. Medical bills from an accident can add up quickly. To cover those costs, PIP is available. PIP covers you, and your passenger’s medical bills, no matter caused an accident. Be aware the coverage is not available in all states.
Scope of Coverage
Probably the most significant difference between auto insurance policies is what they cover. Policies can vary widely on what is covered and what is not.
Here are a few types of coverage available:
Permissive Use
Permissive use means that you can give someone permission to drive your car who isn’t listed on your policy but will be covered to drive on a short term basis. This fail-safe is a built-in way some plans keep you secure, such as if you have had too much to drink or are ill and it would be unsafe if you drive. If your policy doesn’t allow for permissive use, then whoever is driving for you in those situations would not be covered. Some drivers would opt to drive themselves, even if impaired when they know someone else driving violates their coverage. In that scenario, they may choose to drive themselves and endanger everyone. An insurance company does not want that kind of risk, hence the short term permission to drive.
Mexico coverage
Mexico coverage simply means your auto insurance policy coverage will extend into Mexico when you drive across the border. With different policies, restrictions may vary on how far into Mexico you travel and the duration you will be staying. Obviously, this type of coverage would only be of interest if you are driving into Mexico.
Roadside Assistance, Towing, and Labor
Roadside assistance, towing, and car repair labor is available through almost all auto insurance provider. The difference from one policy to another is what is offered. The service may not be 24/7 as you were lead to believe. What you get could be limited in terms of what is covered and what isn’t. You could be required to pay for the service upfront and would need to send in a receipt as proof of the work that was done to be reimbursed.
Comparing Vehicle Insurance Policies
An insurance policy is only as good as the agents or customer service representatives who will help during an emergency, and it is only as good as how swiftly it gets a driver back on the road. When comparing car insurance policies, it is crucial to examine a company’s customer service record. Accolades are usually displayed prominently on a company’s website when they receive awards and top rankings.
Knowing if you can count on an auto insurance company when you need them should be at the top of your list when you are searching for a policy. Read reviews from the insurance company’s customers in order to get a clear picture; you will need to look at more than one website. Some companies will scrub negative comments from their websites, so looking at several different sites is essential.
Additional Tips when Searching for the Right Automobile Insurance Coverage
Benefits are not the only thing that you need to look for when it comes to coverage. Finding an honest insurance company can sometimes be difficult. Some policies have conditions in the fine print that may not stand out but can mean a big difference when an accident happens. More and more insurance companies are looking for ways to limit their liability, which means you need to be aware of these changes.
Some insurance companies are dictating in your car insurance policy; no one who is under the age of twenty-one is covered to minimize their risk. How does that affect you? If you have a child who is olde enough to drive, but under twenty-one, and if they are driving your car and an accident occurs, the insurance company will not cover any of the damage.
Other policies require that you list every member of your household who could possibly drive your car. If anyone not named on your policy drives your car and has an accident, your insurance company will decline coverage. Insurance companies can also decline due to the driver’s behavior.
Some insurance companies state that if your car is speeding at the time of an accident, you will not be covered. It seems common sense that speeding could result in a lack of coverage, but be sure to know how far over the speed limit is not covered. Is one mile per hour over the speed limit too much, or is it five? Be aware of what kind of conditions for coverage your policy includes. Don’t get caught flat-footed when an accident occurs because you didn’t read your policy.