Most of us haven’t got a clue about what our car insurance really covers. Here’s what car insurance covers and how you can save money on your premium.
Collision insurance pays for repairs to your car from a collision regardless of who was at fault.
Raising the deductible – the amount you pay before your insurance company pays a claim – will save you hundreds of dollars a year on your premium. If you have an older car that’s not worth a lot, dropping your coverage, especially if your car is worth less than your insurance premium, can save you $450 or more.
Comprehensive insurance pays for non-collision damage to your car from such things as vandalism, break-ins, fire, natural disasters, and other causes.
Raising your deductible will lower your premium considerably. Dropping this coverage if you drive an older car will also save you money.
Liability coverage pays for claims made against you for property damage and physical injury. It’s really the most important coverage because it protects you from losing your assets.
Don’t skimp on this one. If you don’t own much, you can stick with the minimum coverage. But if you do have assets you want to protect, get as much coverage as you can to protect those assets. Increasing your liability coverage won’t cost you that much more.
Medical coverage pays medical expenses when you or your passengers have an accident. It also pays expenses if you or your family are injured in someone else’s car.
Consider dropping this coverage if you already have health insurance. And if you don’t have health insurance consider getting it instead of carrying medical coverage on your car insurance policy.
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The author, Brian Stevens, is a former insurance agent and financial consultant who has written numerous articles on car insurance.