Auto Insurance - Understand the Auto Insurance.

hello my name is Anshul I'll be speaking on the basics of auto insurance for most people buying an automobile is their first major purchase. 

Auto Insurance - Understand the Auto Insurance.

actually a new car is second only to a home as the most expensive purchase many consumers make with vehicle prices averaging over $28,000 it's easy to see 

why one would want to protect that investment before we talk about coverage for the automobile itself I'd like to start with what many people believe is the most important coverage of all liability coverage liability coverage pays for the injuries or damage you or someone driving your car caused to other 

people or their property the two liability coverages are called bodily injury liability and property damage liability every state has different laws dictate in the minimum coverage you must carry for this some states require you to prove you have insurance before registering a motor vehicle in other states 

use the honor system where you only have to provide proof if you have an accident or violation a typical state require minimum coverage is 25 50 10 and I'll provide an example shortly to explain what that means there are four states that do not require drivers to carry any liability coverage just because 

it's not required by law doesn't mean you don't need it let's say you have an accident you're distracted momentarily and rear-end the BMW in front of you there are three people in it all of whom suffer some injury if you're carrying liability coverage of twenty five fifty ten that means your insurance 

company will cover the cost of any one person's injuries rehabilitation expenses pain and suffering and time loss from work up to $25,000 but they will not pay more than fifty thousand dollars for the accident regardless of the number of people injured this is the bodily injury portion and your insurance 

company will pay up to ten thousand dollars for the property damaged so three people are injured let's say their injuries total 75 thousand dollars and the BMW has rear-end damage of thirteen thousand dollars your policy will pay for fifth thousand dollars for all injuries and ten thousand for the property 

damage where does the remaining twenty five thousand for bodily injury and three thousand for property damage come from once your policy pays the maximum limits you could be held personally responsible for the remaining amount it's generally recommended that you carry more than the state 

minimum coverage to protect yourself from this financial risk the next coverage under an automobile policy is medical payments coverage this provision protects you and your passengers if you're hurt in a car accident regardless of who's at fault the coverage also extends to you and your family members if 

you're a passenger in someone else's car or if you're a pedestrian injured by an automobile medical payments coverage pays the medical bills resulting from an accident up to a per person maximum commonly $5,000 there are no deductibles and no waiting period under this coverage and prescription 

drugs related to the injuries are covered consider that accident with the BMW again let's say that you and your passenger are both injured and taken by ambulance to the hospital medical payments coverage of $5,000 will cover the cost of the ambulance ride the emergency room visit and subsequent doctor's 

visits up to $5,000 per person if your medical bills total $7,000 and your passengers total $3,000 the policy will pay $8,000 under this coverage some states have a medical payments coverage known as personal injury protection or pip this coverage may have a deductible and it may allow you to collect 

for lost wages and rehabilitation expenses to things that regular medical payments coverage does not cover a third coverage provided by an automobile insurance policy is uninsured and underinsured motorist coverage this coverage is quoted similarly to bodily injury liability even though mandatory 

insurance laws exist in 48 states nearly 15% of all accidents are caused by uninsured drivers uninsured motorist coverage provides protection for you and yourpassengers when you're injured in an accident with an uninsured motorist it will cover your medical bills rehabilitation expenses lost wages pain and 

suffering things you could have claimed against the at-fault party's insurance if they had it under insured motorist coverage will cover those same losses if the at fault parties coverage is insufficient for your loss keep in mind in most states the uninsured underinsured motorist coverage applies to injury 

only and not for damage to your vehicle protection for your automobiles provided under the collision and comprehensive portions of a policy collision coverage applies when you have an accident involving another vehicle or an object such as a telephone pole a guardrail a building or when you overturn your 

vehicle comprehensive coverage applies in losses involving fire theft vandalism broken glass hitting an animal flutter hail damage or other losses not caused by collision these coverages have a deductible the amount you must pay before the insurance company pays for damages common collision deductibles 

are $500 or $1,000 and common comprehensive deductibles are 100 or 250 if your automobile is financed then you're required by the bank or financier to carry comprehensive and collision coverages until that loan is paid off it's important to note an insurance company will never pay more to fix your 

vehicle than the vehicle is worth two other coverages available through many insurance companies are towing an emergency road service and rental car reimbursement while these coverages are optional I always recommend them as part of my full coverage package automobile insurance rates are based on 

many factors including where you live your age what you drive how much you drive and the coverage you carry one way to keep your insurance cost down is to take high comprehensive and collision deductibles as a vehicle gets older and is not financed many people choose to draw these two coverages 

completely as a way to save money additionally many people choose to pay for small claims out of their own pockets as a way to keep their rates down but remember the coverage you carry is just one of the factors contributing to the cost of insurance there are things you can do to make sure you get the 

best price possible the first is to keep your driving record clean your driving record is used as a predictor of future experience accidents and violations stay on your record for three years and major violations and suspensions stay on for five years many companies now use a scoring model that 

combines your driving record with a variety of other information including certain elements of your credit history and prior insurance claims to determine your cost for insurance this means that paying bills on time could affect your insurance rate as could the number of claims you file on your policy automobile insurance can be confusing but a little knowledge can go a long way in providing you the protection you need.