Auto Insurance Buying Guide
Auto insurance tip #1
Understand why you need auto insurance
In short, you need car insurance to protect your car, yourself and your passengers. You also protect any assets, like your home and savings, as well as comply with state law.
Auto insurance tip #2
Know your current coverages-but be willing to adjust
Use your current coverages and limits as a starting point; you can refer to your declarations page for this information. Then, adjust your coverages as necessary to match your lifestyle-which might be different than it was when you first bought the policy.
For example, if your teenager starts driving next month, you might consider adding him or her to your policy now. Or, if you just bought a new car, you might choose loan/lease payoff coverage, so that if your car is stolen or declared a total loss, you'll have help paying off your loan or lease.
Auto insurance tip #3
Decide what you want to protect, then choose your coverages
Here are some of the auto insurance coverages that might be available in your state:
| Your goal | Coverage to buy |
|---|---|
| Protect your car against damage caused by a collision with another car | Collision |
| Protect your car against damage caused by hitting an animal or other events, like theft or a fire | Comprehensive |
| Cover repair/medical bills for an accident that's caused by a driver who has no insurance or doesn't have enough | Uninsured/underinsured property and bodily injury |
| Cover medical bills if you or your passengers are seriously hurt in an accident | Medical payment/personal injury protection |
| Protect your assets in case of a lawsuit | Bodily injury and property damage liability |
| Cover the cost of a rental car if you have a claim | Rental reimbursement |
| Pay off your loan/lease if your vehicle is declared a total loss or is stolen and not recovered | Loan/lease payoff |
Auto insurance tip #4
Use deductibles to your advantage
Your deductible is what you agree to pay out of pocket when you use your car insurance. In general, the higher you set your deductible, the less you'll pay for your policy. And conversely, if you set your deductible low, you'll pay more for your policy, but less when you have a claim.
Auto insurance tip #5
Know that certain things affect your rate
Insurance companies evaluate a variety of things when they calculate your rate, from your driving record to where you live and how many miles you drive on average. Keep this in mind when you see your rate.
