Auto Insurance Rate Comparisons

To successfully choose the right auto insurance plan for you, your spouse, or your family, it is important to start by getting a strong grasp of the types of coverage available. Many people make the mistake of just leaving it up to the insurance company salesperson to make suggestions about appropriate coverage. Instead, you should start your call or online quotation process with a firm grasp of the coverage you will need.

As you study the world of car insurance, you will notice various coverage terms being used, such as:

* comprehensive
* collision
* personal injury protection (PIP)
* medical payments
* liability
* uninsured motorist

Liability is actually the most basic type of insurance coverage because it is the type that is required by most governmental bodies in places that require insurance by law. But, any or all of the other types of coverage may be highly advisable in your situation.

A helpful way to make sense of all of these types of coverage is to understand that there are three details about each one that determines whether you should buy it and how it can help you. Those details are:

a. whether if, in the event of a claim, you or the other party are the one who receives reimbursement funds
b. whether the type of coverage applies in the cases that the accident is your fault versus being the other party's fault
c. whether the coverage reimburses for property/vehicle damage or for medical payments

Here is how each type of coverage breaks out:

* Collision: pays you for property damage if the accident is your fault
* Medical Payments & Personal Injury Protection (PIP): pays you for medical payments if the accident is your fault
* Uninsured Motorist: pays you for property damage and medical payments if the accident is their fault and they do not carry insurance
* Liability: pays the other party for property damage and medical payments if the accident is your fault

(Also, see the chart below for more details on how each coverage type fits into each of these 3 categories).

Notably, there are two other types of coverage that do not fit into this scheme because they do not involve car accidents. They are:

* Comprehensive: pays for property damage due to theft, vandalism or fire
* Towing: pays for towing if you have car trouble

So, before you shop for insurance quotes, be sure get a strong handle on the coverage types you will need.

Now that you have a better sense of the auto insurance coverage types you will need, it is time to start comparing rates. Start by writing out the exact coverage you will need. Try organizing the data in a spreadsheet program like MS Excel so that you can keep track of everything.

Remember, you will need to also get a sense of the coverage limits you will want to shop for. Limits simply refer to the maximum amount your insurance company will be willing to pay for each person and/or accident. Usually, coverage limits are listed on insurance policies like this:

Medical payments for bodily injury: $50,000 per person/$150,000 per occurrence

This means that the insurance company would cover the medical expenses of one person for up to $50,000, two persons up to $100,000 (total), or three persons for up to $150,000 (total). However, it would not cover any more than that, since the stated maximum per accident in this example is $150,000.

While $50,000 may seem like a lot of money, in terms of medical bills it is not necessarily very much. When it comes to coverage limits, the smartest thing to do is to buy as much as you can afford, provided that your premium does not go up too much.

A final tip before you start shopping: be sure to shop for your quote with reputable car insurance companies. You will want to find companies that have a proven track record. Preferably, consider quotes from insurance companies who are affiliated with large, well-established parent companies. You find find such companies online or through traditional search methods.