Compare Auto Insurance Policies

When you compare auto insurance policies, be sure to compare the difference between each level of coverage according to your state. Every state operates under a different system when it comes to auto insurance policies. Because of this every state will require their drivers to purchase different coverage options and will have much different average premiums. When you compare auto insurance policies, familiarize yourself with how your specific state operates to ensure that you are not only getting the best deal but that you are also purchasing adequate coverage for the roads.

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In general, there are three systems in which your state will operate – through a tort system, which is the most common system; through a no fault system; and through a financial responsibility law. Every state will have different rules and regulations pertaining to their system so be sure to compare how your state works when you compare auto insurance policies.

Under a tort system, the person responsible for the accident will be responsible for the expenses to both his car and the other driver’s vehicles. This means that if you are hit by someone else, you will be compensated through his insurance, not your own. However, if you hit someone else, your car coverage company will offer compensation to the other driver and to yourself depending on how much coverage you have purchased.

Most states that operate under a tort system will require their drivers to purchase liability coverage which will pay for the costs to the other driver if you are found at fault. This includes bodily injury liability as well as property damage liability. Every state will vary when it comes to the minimum limits so be sure to compare your specific state when you compare auto insurance policies. Many states will also require their drivers to purchase uninsured motorist coverage as part of the mandatory basic requirement.

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Under a no fault system, every driver is responsible for his own costs regardless of who is found at fault for the accident. This means, no matter who caused the auto accident, you will work with your own insurer for compensation. This can make the process a lot easier but you also lose some of your rights to sue under a no fault system.

Most states that operate under a no fault system will require their drivers to purchase liability coverage as well as personal injury protection. This will pay for any damages to your car as well as any medical related expenses. Again, some states also require uninsured motorist coverage while others do not. When you compare auto insurance policies, be sure to compare the mandatory limits as well as the amount you would like to purchase. Yu may operate under a state that requires $25,000 of PIP but you may choose to compare auto insurance policies that come with $200,000 of PIP. This will depend on your individual needs.

The financial responsibility law requires all drivers to either have enough auto insurance to cover all related costs in the event of an auto accident, or to have enough money in the bank. There are only a couple of states that use the financial responsibility law and most are phasing this system out in favor of mandatory coverage. Under this law, most drivers will look into some level of coverage regardless of what their bank account statement says.

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When you compare auto insurance policies and prices, consider where you live and what system you are using. If you are using a tort system, for example, then you might want to consider additional extras such as collision and comprehensive coverage. As mentioned above, under a tort system, your provider will pay for damages to the other driver but, under the basic coverage policies, not to yourself. Collision coverage will pay for these on road costs to your car while comprehensive coverage will pay for off road expenses such as damage due to a storm or theft.

You might also want to consider roadside assistance and loss of use coverage regardless of where you live. Roadside assist will pay for towing related costs while loss of use coverage will pay for any additional expenses such as car rental hire rates.

Auto insurance policies can be confusing which is why you should compare the various terms and conditions on each policy when you compare auto insurance policies. If you have any questions about the policies it is important to speak to a representative about your concerns and clarify what the quotes fine print means. After all, if you are ever in an auto accident and need to make a claim, it is important to understand what is covered and what is not. This will save you a lot of headache down the road.

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