Purchasing auto insurance can feel overwhelming with all the different companies and auto insurance options available to you, it is hard to know where to start. With our personal auto insurance buyers guide we will teach you the basics of auto insurance helping you to make an informed decision when purchasing your policy.

Reasons You Need Auto Insurance

State Law– The number one reason you need to purchase an auto policy is state laws require it. Most states require that you carry at least a minimum limits liability policy.

auto insurance buyers guideNew Car– If you purchased a new car and are making payments on it, your lender requires a policy with full coverage on it.

Financial Protection– Auto liability insurance protects your assets from third-party lawsuits in the event of an accident.  

Auto Policy Coverages

There are different coverages or protections of an auto policy. Some are required (liability) while others are optional (physical damage), each coverage is priced out and based on the limit you chose.   

Liability Coverages

  • Bodily Injury Liability- This coverage pertains to third-party injuries caused by you and family members listed on the policy.  This coverage is required by state law.  
  • Property Damage Liability-This coverage pays for damages you cause to someone else’s car or objects and structures your car hits. Also required by state law.  
  • Uninsured motorist coverage reimburses you if an uninsured or a hit-and-run driver hits you. Underinsured motorist coverage pays when an at-fault driver does not have enough insurance to pay for your loss fully. Some states may require it.
  • Medical Payments or Personal Injury Protection (PIP)-This coverage pays for treating injuries to you and your passengers. Personal Injury Protection (PIP), which is available in “no-fault” states, can also cover lost wages and funeral costs. Some states may require it.auto insurance contract

You may check with your state DMV or Insurance Department to see what coverages are required.

Physical Damage Coverages

  • Collision-This coverage pays for damage to your car from a collision with another vehicle, an object or a pothole or from flipping over.
  • Comprehensive-This coverage compensates you for damage to your car that’s not caused by a collision. It covers theft, hail, windstorm, flood, fire and hitting animals.
  • Comprehensive coverage also pays for damaged windshields. Some companies will not charge you a deductible for windshield repairs.
  • Comprehensive and Collision coverages are required if you have a lienholder(making payments) on your vehicles.

Most insurers offer additional types of coverage, such as towing and a rental car when your car is disabled.  Each type of coverage likely will increase your premium so consider what you need.

Things to keep in mind:

Most auto policies do not cover optional equipment such as stereos, CD players, navigation systems auto insuranceand cell phones not permanently installed in your car, or maintenance for your vehicle.

Auto insurance will not pay off your loan if your car is totaled and its market value is less than what you owe. This is the reason auto dealerships and finance companies may offer guaranteed auto protection (GAP) insurance.

If driving into Canada, you will have insurance coverage.  However, if you are driving to Mexico, you will need to buy Mexican auto insurance.  

Some companies will require a separate policy for:

Factors that Determine Rates

Insurance companies look at a variety of factors when determining your auto insurance rates.  Check out these 32 questions that determine your auto insurance premiums.  

Shop Around

Before you buy, it is best to get a few quotes from different insurance companies.  At A Plus Insurance we are an independent insurance agency which means we work with multiple carriers to bring you the best rates possible.  As a consumer it is important that you research the companies you are working with, you can look up the financial ratings of insurance carriers on sites such as:

A.M. Best Co. ( www.ambest.com) 908-439-2200

Fitch Ratings (www.fitchratings.com) 800-893-4824

Moody’s Investor Service, Inc. ( www.moodys.com)

Standard & Poors (www.standardandpoors.com) 800-523-4534

Weiss Ratings (www.weissratings.com) 877-934-7778

Want to know what our customers are saying about us? Check out their testimonials here.

Responsibilities as an Insured

It is important to recognize that an automobile insurance policy is a legal contract. It explains your rights and responsibilities and those of the insurance company. Keep your policy in a safe place at home and know the name of your insurer. There is also essential information regarding payments and filing claims.

We are always here to answer questions you may have, please feel free to contact us!

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auto insurance buyers guide