Choosing Automobile Insurance Options

Are you confused about the various Automobile Insurance Options? This article describes the various categories of Automobile Insurance so you can be better prepared when updating or initially buying automobile insurance.

Categories of Automobile Insurance:

1. Bodily Injury Liability: covers the harm you may cause to another in an accident. Harm caused may include medical bills or lost while the individual recovers.All drivers are required by each state to carry a minimum amount of Bodily Injury Liability Coverage.

2. Property Liability: covers the cost to repair or replace the damage to property you may cause in an accident.

Note: It is important you carry sufficient coverage for both Bodily Injury and Property Liability. You will be liable to make up the difference between fair and reasonable claims (possibly as designated in a court case) and the amount of liability coverage you carry. For example, if you carry $100,000 in liability coverage but cause $150,000 in damages, you will be personally liable for the $50,000 difference and any court fees required to collect.

3. Personal Injury Protection, PIP: Unlike the previous liability coverages which cover the other injured party, this option pays medical bills and lost wages for you and any of your passengers involved in the accident. In the event of death, this category also covers funeral costs. Some states require this coverage and you may be able to skip if you already have good medical insurance coverage.

4. Collision and Comprehensive: This covers the cost when your automobile is damaged. There is usually a deductible which is the amount you have to pay before your insurance will cover the remaining damage. A deductible of $200 means you cover the first $200 of repair for your car and your insurance will cover the rest - so scratches or incidental damage will be covered by your insurance since repair is generally under $200. You are usually given a choice of what deductible amount to select; the higher the deductible amount selected, the more items you will pay for but your monthly premium payments will be lower. Collision will apply in the event of an accident; Comprehensive applies when damage occurs without an accident such as vandalism or an act of nature.

5. Uninsured or Under-insured Motorist: A few states require this coverage. This coverage applies if another person is at fault for the accident but does not have sufficient (or any) insurance to cover the costs of damages. This coverage also applies if you are the victim of a "hit and run" incident where the other person is not known.

It is important to carefully consider your needs for each of the categories for coverage. If you live in an area with much roadway construction, you may want to carry a lower deductible for collision and comprehensive coverage whereas in a high crime area, you may want to carry a higher deductible.

Balancing your needs and the state requirements will help ensure you carry enough insurance without over-insuring yourself. Always look for a reputable company and representative by researching your insurance company and representative of choice. Research can be done through friends or co-workers who live and work in similar areas or on-line through community bulletin boards or referral sites. Comparing multiple quotes will help you find the best deal.