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Paying the Right Amount for Car Insurance

Almost every state requires that motorists prove that they have compensation in place in the event that they are liable for causing a traffic accident resulting in bodily injury and/or property damage; the most common method of satisfying these requirements is done by purchasing an auto insurance policy. Therefore, it is important for individuals to find the cheapest policies available to ensure that they are not overpaying for coverage.

In order for consumers to make sure that they are paying a reasonable premium, it is necessary to take the time to determine the amount and types of coverage which be beneficial; far too often motorists either become underinsured or purchase too much protection. Many consumers pay than they should for their policies because they may have more coverage than they need; a common mistake that individuals make is to purchase or keep comprehensive and collision on a policy for a vehicle with an insignificant value. It is often suggested that if an automobile is worth less than $1,000 the owner should consider no longer insuring it against physical damage and theft.

A good example of being underinsured is purchasing minimum requirements in states with low required limits. For instance, according to the California Department of Insurance. the state requires $15,000 for bodily injury to one person and $30,000 per accident; these limits can be easily exhausted in the event of a serious accident due to the cost of medical care and can put the insured's assets at risk. If possible, it can be worth it to pay a little extra for higher

limits to protect against having to pay out of pocket for any remaining compensation due to another party when the cost of injuries exceed the amount of covered by minimum requirements.

Once an individual determines what level of protection is needed, the most effective way to make sure that the right amount is paid for coverage is to complete an auto insurance quotes comparison based on the desired product. The rates that a carrier can charge a specific individual can differ greatly from one insurer to the next; according to the Alabama Department of Insurance. a report showed there could be a 200 percent difference in premiums for identical products. Taking the time to compare quotations will help avoid paying an excessive premium.

Comparisons should also be done by motorists who are currently insured; this is because although a driver's current carrier may have been the most affordable at the time of purchase, there may be a company that can now offer a better rate. By occasionally comparing rates, consumers can ensure that their insurer is still the most competitively priced, especially if they receive a rate increase at time of renewal.

When comparing quotes consumers should be sure to inquire and take advantage of any discount that they may qualify for. Many companies offer numerous auto insurance discounts which may translate into significant savings; common discounts include rate reductions for having a clean driving history, good credit score, insuring multiple vehicles on one policy and having an automobile equipped with certain safety features and anti-theft devices. By understanding the coverage needed and properly comparison shopping, motorist may help ensure that the right price is paid for the right policy.


Category: Insurance

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