Car insurance is a large percentage of the expense of owning a car, so finding ways you can save money is essential. In order to save the most, it is important to understand what you purchase. There are three types of coverage a driver can purchase: liability, collision, and comprehensive.
Liability coverage protects you, the driver, and covers medical expenses and legal liabilities from an accident. Each state has individual requirements for liability.
Collision coverage protects your vehicle and offers repair reimbursement for damage done when a car is in motion.
Comprehensive coverage protects your vehicle from damage incurred that does not involve a moving vehicle such as vandalism, fire, windshield replacement.
Whether a driver purchases comprehensive and collision insurance depends on the age and condition of the vehicle. If the vehicle is new, it is important to protect that financial investment with both collision and comprehensive coverage. Leinholders will usually have basic requirements for how much coverage is necessary. Once your vehicle is older and not worth much in terms of cash value, you may decide to remove all vehicle coverage and only purchase liability, sometimes called PLPD. However make sure to verify the insurance laws in your state before making any insurance changes. CA residents can do so by visiting the California DMV for more information.
In addition to the basic components of insurance, companies offer extras like roadside service and rental coverage. Roadside service can be part of collision coverage or an extra. If it is an extra, consider whether you need it. Do you drive locally and have friends who can help? Do you go long distances in areas where you do not know others? Is your car older and frequently breaking down? The answers to these questions will be the deciders. Rental coverage is extra money paid to fund a rental car if a vehicle is being repaired from an accident. While rental coverage is not usually expensive, it may not be necessary if there are dealerships that offer free rental cars. Check prior to paying for the extra coverage.
Be sure all discounts possible are included on a policy. These vary with insurance companies but often include safe driver, mutli-car, multi-policy, organization memberships, and additional credits. Make sure to double check those deductibles as well. If you can afford the risk of a higher deductible, you can save a little money on the premiums.
Overall, car insurance prices depend on you having a safe driving record (tickets increase premiums) and good credit as well as purchasing the coverage needed without any extras. Every penny counts, and so does saving them whenever you possibly can.
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