Which Car Insurance Plan is Best for You?


Buying car insurance can be confusing. There are dozens of plans to choose from, each offering different levels of coverage and with different costs attached to them. This article will help you find the best car insurance plan for your specific needs so that you can pay as little as possible every month, but have peace of mind knowing that if something happens, you’ll be covered.


Why Get Comprehensive Coverage

If you live in an area that’s prone to frequent weather conditions, you might want to consider adding comprehensive coverage to your car insurance plan. Comprehensive coverage provides protection against such things as vandalism, theft, fire and natural disasters.


It also covers damage from any non-automobile-related occurrences like falling objects or animals running across your path. As a result, comprehensive coverage is typically quite affordable—and can help keep your auto loan rates low since less of a deductible will be required. To get the best value on comprehensive coverage, look for deductibles under $1,000.


Many Options

Choosing a car insurance plan may seem simple at first glance, but there are many factors to consider. For example, how many miles will you be driving each year? What type of vehicle do you drive? How much can you afford to pay per month or year on car insurance coverage? Are there discounts available that you can use to lower your premium cost?


The more thoroughly you research and shop around, the better decision you’ll make. It might also help to talk with an insurance agent before finalizing your decision. They can go over all your options, such as liability coverage amounts or deductibles and make recommendations based on their knowledge of local laws.


Once armed with information, it’s up to you to decide which car insurance plan best suits your needs and lifestyle. But by understanding the details and being proactive about choosing one, you'll find it easier to get the protection you need for a price that works for you.


Understand Deductibles

The amount of money you have to pay before an insurance company begins to reimburse you for damages will vary by company. Many companies offer no-deductible plans, which means that, should you get into an accident, your auto insurer will cover 100% of any and all damage—even if it's a low-speed fender bender in which no other vehicle was involved. (Keep in mind, however, that with no-deductible plans you'll still be on the hook for your own medical expenses.) Other companies may offer more traditional plans; these often allow you to choose how much coverage you want.


The higher your deductible amount (and therefore less covered by your insurance company), typically the lower your premiums. A typical deductible might be $500 or $1000. That means if your car is totaled, or requires repairs costing over $500 or $1000 respectively, you're going to have to pay the difference out of pocket before claiming reimbursement from your insurer.


What Is Collision Coverage?

Collision coverage can help protect your car if you’re in an accident with another driver. It covers damages to your vehicle caused by colliding with another car or object, such as a tree or mailbox. It does not cover theft, damage from hitting an animal, or damages from flooding (if you’re driving in a flood area). Generally, collision coverage on a personal auto policy is required if you financed your vehicle and have less than 20% equity in it.


If you own your car outright, it’s up to you whether to purchase collision coverage. If you do decide to buy it, the cost will depend on factors like the make and model of your car, where you live, and what deductible amount you choose. For example, if your deductible is $500, then collision coverage would cost about $30 per year.


What Is Medical Payments Coverage (MedPay)?

Medical payments coverage, also called medical payments or medpay, pays for injuries sustained in an accident when health insurance is not available. This may include both medical and funeral expenses. The policy also covers passengers in your car if they’re injured or killed. MedPay helps protect you from legal costs and judgments too—including lawsuits that result from injuries you cause to someone else.


This coverage is available to anyone who drives a vehicle, but it’s essential if you don’t have health insurance (or your health insurer will not cover accidents). All states require drivers to have some form of liability coverage; most states require medpay as well. In contrast to other types of auto insurance policies which limit the payout, often up to $50,000 per person, medpay has no cap on the total amount it can pay out. 


The average cost for this type of coverage is about $200 per year, although rates vary by location and company. 


Drivers should be aware that certain vehicles have deductibles associated with the use of this type of protection;


What Is Uninsured Motorist Coverage (UM)?

One of a handful of coverages offered with liability car insurance, uninsured motorist coverage provides financial protection if you are involved in an accident caused by another driver who doesn’t have enough auto insurance to pay for your medical bills and lost wages. If a driver without insurance causes an accident that injures you or your passengers, UM will protect you.


UM will also cover damage to your vehicle and other property if they are damaged by an uninsured driver. It may also be referred to as uninsured/underinsured motorist coverage. The idea behind this type of coverage is the same as other types of insurance: it provides financial protection in the event that something bad happens.


And because most people don't think about what would happen if someone else was at fault for their injuries, uninsured motorist coverage can provide some peace of mind just knowing that you're covered financially even when someone else isn't following the law.


What Is Underinsured Motorist Coverage (UIM)?

If you’re involved in an accident with an underinsured driver, underinsured motorist coverage, commonly called UIM, can help pay your costs. Here’s what you need to know about UIM and how it might apply to your policy. (UIM) is most often used when another driver has insufficient insurance to cover a serious accident.


Underinsurance can be very common, as it's relatively easy to buy just enough insurance coverage to legally drive on public roads. It can also happen if the other driver doesn't have any car insurance at all! In either case, your own vehicle may not be adequately protected by the other person's limited liability coverage. In many states, drivers are required to carry a minimum amount of liability coverage that pays for injuries up to the state-mandated maximum limit. If you're injured in an accident with an uninsured or underinsured driver, then your injuries could exceed that limit and leave you responsible for medical bills and lost wages from work time missed after being hurt. 

If this happens, there are ways of covering those extra expenses: 

-Your auto insurance company will often extend coverage beyond its minimum limits if the other driver is found liable or there was evidence of contributory negligence; 


-You may qualify for uninsured/underinsured motorists coverage which would provide additional protection against drivers who are without adequate auto insurance; 


-Your personal health insurance plan may offer some assistance.


Choose a deductible amount wisely

The amount of your deductible will depend on how much risk you're willing to take on. A higher deductible means lower premiums, but it also means you'll pay more if you need to file a claim. Setting up an emergency fund can help you avoid filing a claim by covering these kinds of expenses until your next paycheck, which in turn lowers your premium even more.


It's all about striking a balance between risk and cost—something that's easier to do when you've got an emergency fund in place! A $1,000 emergency fund would cover the average American for about 3 months. 


It might seem like a daunting task at first, but setting up an emergency fund could save you money in the long run and make it easier to handle any unexpected financial crisis or large expense. 


Don't forget to have some money set aside before signing up for insurance: There are many variables that go into deciding what car insurance plan is best for you, so be sure to take your budget into account as well as other factors like whether or not you own a home or want rental coverage.


Things to keep in mind while getting car insurance plan quotes online

Consider insuring both your car and home at the same company. They may be able to give you a multi-policy discount. If you do own a home, you should also keep an eye on local insurance regulations. In many states, insurers have to give 30-day notice before they raise rates on homeowners, so it’s a good idea to call your insurer in advance if you think there might be any chance of changing policies in 2018.


Additionally, if you live near areas affected by natural disasters, consider getting flood insurance or earthquake coverage; those types of policies are generally not included under your regular homeowner’s plan.


Flood insurance will cover your home, furnishings, and belongings against damage from water that's been driven into the property by storms or overflowing rivers. Your property will be covered up to the maximum amount of your policy as defined in the contract. 


Earthquake coverage is also optional because earthquakes aren't covered under most standard homeowner's plans. The policy can pay for repairs due to tremors that cause cracks in walls and floors as well as damages from objects falling off shelves when buildings shake violently during an earthquake.

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