You own a car so you probably know something about car insurance. You have heard the words ‘deductible’ and ‘premium’. Do you understand the different parts of a car insurance policy and do you know how to choose the best coverage?
The first step in understanding a car insurance policy is to learn the various types of coverage insurance companies offer. Some of this coverage may be required by your state and some of the coverage may be optional.
Liability - This coverage pays for accidental bodily injury and property damages to others. Injury damages include medical expenses, pain and suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs. State laws determine how much liability coverage you must purchase, but you can always get more coverage than your state requires.
Collision - This car insurance coverage pays for damages to your vehicle caused by collision with another vehicle or object.
Comprehensive - This coverage pays for loss or damage to the insured vehicle that doesn't occur in an auto accident. The types of damages comprehensive car insurance covers include loss caused by fire, wind, hail, flood, vandalism or theft.