Every driver should know the ABC’s of car insurance. Whether you are a newly licensed driver or a seasoned driver, if you are on the road, you will need to be covered by auto insurance. For many drivers, the jargon, and technical terms used to describe different forms of insurance coverage can be confusing.
At Affordable Insurance in Aurora Colorado, we want to make it as simple as possible for consumers to understand their rights and responsibilities when it comes to car insurance. That way they can make an informed decision, keep themselves protected and get the most for their money.
Buying car insurance means that you pay a fixed price or ‘premium‘ to a company and in exchange, they will provide you with financial support in the event of a car accident.
Your policy defines the details of this financial support. The policy is a contract between you and the insurance company. Every policy will follow the general format of having a declaration page, followed by the base policy and then the endorsements. The declaration page contains all the particular information related to you such as your name, policy number, the length of agreed contract, premium and vehicles or drivers covered by the policy. The base policy outlines the provisions of the insurance coverage selected by you and the responsibilities you have as a driver. These can include paying the premium on time and notifying the company if you experience an accident. The endorsements part will detail any additions or exclusions made to alter your base policy.
When shopping around for car insurance and putting together a policy, it is important to know which type of coverage you want. The most common forms of coverage include medical expenses coverage which is similar to personal injury protection (PIP). This type of coverage can cover the costs of medical or funeral expenses incurred by you or your passengers following an accident. Collision coverage will pay for the damages done to your car if it hits another car, object or overturns. Liability coverage refers to insurance that pays for property damages or bodily injury costs of people in another vehicle if and when you are found to be responsible for the accident. Liability insurance can also cover the costs of litigation by the other party involved in relation to a car accident.
Another type of insurance coverage to consider is uninsured or underinsured motorist bodily injury coverage. In the event of an accident that is not your fault, if the other driver does not have sufficient insurance coverage to pay for damages or injuries suffered by you, this insurance will cover your costs instead.
Finally, comprehensive insurance will cover you for damages not caused by collisions such as vandalism, fire, hail damage, or theft.
Before signing any contract, check your policy for information on deductibles. A ‘deductible’ is the amount that you will have to pay out of pocket before your insurance will start to cover the costs. Opting for a higher deductible can lead to a lower premium cost. Once you are comfortable with the ABC’s of car insurance and the language used in policies, getting insurance that is right for you becomes so much easier.