What’s your auto insurance policy telling you?

Whether you’re getting a new vehicle or going over your policy, it’s always best to know whether your car is properly protected. Many people get car insurance without fully understanding their policy or its components. Every car should have protection that includes damage, medical coverage, and legal liability costs.

From the very beginning, the policy form should be clearly understood. This form describes your coverage, any conditions, and exclusions. Most basic coverage should include the following:

  • Comprehensive
    This covers your car from things besides damage like fire, theft, vandalism, and falling objects.
  • Collision
    This covers any physical damage to your car in the event of an accident or collision with another object.
  • Liability
    There are three components to liability: bodily injury, property damage, and uninsured motorist. This is to cover expenses in the event you are charged with negligence or damage you cause to others. Uninsured motorist covers any injuries or damage if you are injured by someone who does not have insurance or has fled the scene.

There are other coverage options available that may be of value to you:

  • Rental reimbursement
    This provides coverage or rental expenses for a rental car in the event your car is damaged. There are usually daily and total maximums based upon your choices.
  • Emergency road service
    No one wants to be stranded in the middle of nowhere in the event their car starts acting up. This coverage will tow your car for a certain number of miles and will also come to change a tire or replace a key.
  • Medical payment
    This coverage pays medical or funeral expenses for you or someone injured or killed in an accident while driving or riding in your vehicle.

Can you afford your deductible?
A deductible can be tricky. While having a higher deductible also means you have a lower insurance premium if you choose a deductible too high, you won’t be able to meet your financial obligation and your vehicle may not get fixed. This is paid FIRST before the insurance company makes any payments on your losses. When going through your budget, make sure you have a deductible that is reasonable but doesn’t price yourself out.

Before getting a new policy
Before you sign on the dotted line, make sure you review everything on the declaration page including your personal information, year, make, model, and VIN number of the car. Next, make sure the lienholder information is correct if you have a car loan. If not, the lienholder’s information should not be there.

Review every aspect of the policy, including the collision and comprehensive coverage. While this is not necessary to have unless you have a lienholder, it’s always better to be safe than sorry. If you can’t afford to replace your vehicle out-of-pocket, don’t skimp on this coverage option.

Make sure you review what’s required in your state and ask for discounts as well. Safe driver, homeowners, and association discounts can help you get a lower premium. Additionally, make sure you notify the insurance company if circumstances change. If you move to another area, you may have a lower premium.

Use these recommendations to get an auto insurance policy that works for you and protect yourself with the right insurance.