What’s in Your Auto Insurance Policy?
If you are comparing auto insurance policies, it’s important to consider price, but there’s a little more to it. Is the price you’re paying going to provide the coverage you need if you are ever involved in an accident? Sure, you are saving money with a cheaper rate, but if that cheaper rate doesn’t sufficiently protect you and your assets, you are exposing yourself to paying so much more.
If you are renewing your auto insurance or considering a new policy, there are a number of questions to think about and items to compare:
- How well are you covered?
- What are your deductibles?
- What limits are there to what the auto insurance company pays?
- What are the auto policy’s terms and conditions
- Are you eligible for discounts or other benefits?
- What’s the auto insurer’s reputation?
- What are you going to pay?
How Well Are You Covered?
There are various types of auto insurance coverage. You need to look at your policy for:
- Liability coverage for damage or injuries you caused to another driver, passengers, or property (typically another vehicle) while driving your car.
- Collision and Comprehensive (usually combined together). Collision covers damages you cause in an accident with another car, in an accident caused by someone driving another car, and in accidents caused by hitting anything other than another car, such as a fence or building. Comprehensive provides the cash value of your car if it is stolen or vandalized. (Your car’s value largely determines the cost of collision and comprehensive coverage. As the value of your vehicle declines, so does the amount comprehensive and collision pays out.) Comprehensive also covers damages caused by a collision with a deer or other animal, severe weather, explosions, falling objects, riots, and civil disturbances.
- Personal injury protection (PIP) / Medical payments (Medpay) cover you and your passenger’s injuries resulting from an accident.
- Uninsured/underinsured motorist covers vehicle repairs and injuries if an uninsured or underinsured driver hits you or if you get hit as a pedestrian.
What Are Your Deductibles?
A deductible is the amount you must pay out-of-pocket before the insurance company starts paying. The higher the deductible, the lower the premium (since there is a lower risk for the insurer to pay out). You don’t want a higher deductible than you could reasonably pay in the event of a loss.
There are different deductibles for different types of coverage. Make sure you can afford the deductible if you ever need to file a claim. The deductible is usually fixed by the lessor or lienholder for a car lease or loan.
Word of warning. If the cost of repairs is less than or not much more than your deductible, don’t file a claim. This can raise your rates, even if you didn’t cause the accident.
Look for Limits to Your Auto Insurance Coverage
Determine how much the insurance company actually pays for a claim and that it protects your assets and potential liabilities.
What Are the Terms and Conditions?
Every auto insurance policy contains terms and conditions that may affect your financial exposure in the event of a claim. The ones you need to look at relate to exclusions, limitations, and cancellation policies.
Are You Eligible for Discounts or Other Benefits?
You may be eligible for any number of discounts if you live in Michigan, especially the Lansing area. These include discounts for safe drivers, student drivers, certain safety features and anti-theft systems, and multi-policy customers.
In addition, some auto insurance companies offer benefits such as roadside assistance, rental car reimbursement, cracked windshield replacement, or accident forgiveness. While not discounts, they can save you money if you ever need to use one of these.
What’s the Auto Insurer’s Reputation
How do you find out about other people’s experiences with an auto insurer? Customer reviews posted online are one source. Another is to consult with your insurance agent.
What Are You Going to Pay?
Don’t automatically go for the cheapest. There may be hidden fees or you may not get sufficient coverage. Stay within your budget, but don’t skimp so that you are financially vulnerable in the event of a claim.
An independent insurance agent can help, such as Compass Insurance Agency Lansing, because we work for you, not the insurance company. We compare over 20+ insurance providers to get you the best auto rates, customer service, and insurance coverage that you can afford.
It pays for your Compass insurance agent to shop around for your home and auto insurance and compare apples to apples. On average, we save our customers almost $800 a year on auto insurance! Give us a try today!
