Auto insurance is something that all drivers need to have in place but can be confusing to a number of people.The following answers to frequently asked questions about auto insurance coverage can help consumers make good choices about these types of products.
What is a minimum level of coverage?
In most parts of the U.S., vehicles registered in the state must have at least a certain level of auto insurance coverage in place. A consumer can choose to buy a policy with a higher limit if he or she chooses, and in most cases this is a good idea. Minimum coverage levels tend to be on the low side and may not provide enough protection for the diver if a serious at-fault accident occurs.
What is a policy deductible?
The policy deductible is the amount that an auto insurance buyer has agreed to pay out of pocket before the insurance company will pay anything toward settling a claim. The higher the deductible, the less risk the insurance company has to assume on behalf of a policyholder. As a result, customers who choose a higher policy deductible are rewarded with lower rates for their coverage.
What is the difference between collision and comprehensive coverage?
Collision coverage pays for physical damage to a vehicle caused by striking an inanimate object or in a rollover accident. Comprehensive coverage pays out when the damage to the car was caused by something other than a collision, including hail, falling objects, wind, flooding, fire and theft.