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Cheap Auto Insurance Basics: Tips, Terms, And Definitions

Car insurance is something everyone that is involved in driving has to pay in order to be covered for serious accidents or other related events. Although many states have different laws about automobile insurance, they all agree that it is necessary for EVERY citizen driving a motor vehicle to have an auto insurance policy with a carrier. Let’s look at some tips that will aid you when searching for cheap car insurance and also list some terms that are very important to know if you want to understand the types of coverage available.

Common Auto Insurance Terms

The first thing you need to do before actually purchasing your auto insurance policy is get to know some of the terms used by the insurance companies. This will allow you to communicate with the insurance providers and find the policy that will best meet your needs. Some of the most important terms are as follows:

  • Additional Insured or Additional Interest: This refers to a person of organization (other than the insured) who is protected under your policy. Children with learner’s permits or with valid driver’s licenses that don’t own their own car and share cars with their parents would fall under this category.
  • Bodily Injury Liability: Part of your auto insurance policy that will cover any expenses caused to another person (physical injury or death) at the time of the accident.
  • Collision Insurance: This coverage pays for the insured person’s own car in the event of a collision.
  • Comprehensive Coverage: Covers damages to a vehicle caused by events other than collisions. This can include fire, theft, vandalism, etc.
  • Continuous Coverage or Continuous Liability Insurance: This refers to how long the insured person has had coverage on the vehicle.
  • Deductible: This is one of the most important terms because it is used constantly. The car insurance deductible is the amount the policy holder must pay before the insurance company pays the remainder of the loss (up to the policy limit).
  • First Party Benefits: This pays to the policy owner or others covered by the policy in the event of an injury no matter who was at fault. Covered services include medical expenses, loss of income, funeral services, and other similar expenses. This may also be called Personal Injury Protection or PIP.
  • Lapse in Coverage: The point in time when a policy is terminated due to the failure of paying premiums or when the contract is void for some other circumstance.
  • No-Fault Insurance: (Only enacted in some states) Auto accident compensation laws that require auto accident victims to collect directly from their own insurance for medical or hospitalization expenses regardless of who was at fault in the accident.
  • Personal Injury Protection: Also known as PIP, this coverage pays for medical expenses, loss of work expenses, accidental death, survivor benefits and even funeral services.
  • Policy: The written contract with your insurance company, this includes endorsements, forms and any other attachments.
  • Premium: The price that a policy owner pays for automobile insurance (specified risk) for a certain period of time (typically monthly).
  • Property Liability Insurance: Protection against the damage to another person’s tangible property.
  • Uninsured Motorist Bodily Injury: Also known as UM or UIM, this p ays for the expenses for a covered person in case of a hit and run, the other driver does not have insurance (or inadequate coverage), or the other driver is unable to pay if self-insured.
  • Waiver of Collision Deductible: This option pays off your collision deductible in case of an accident involving an uninsured driver or a hit and run in which the other person is at fault.

Learn Your State’s Auto Insurance Laws

After familiarizing yourself with some of the terms involved in the automobile insurance policy it’s important to find out your state’s auto insurance laws. Some states (like Florida) do not require you to have Bodily Injury Liability, so it’s important to know what your state’s requirements are and if your state is a No-Fault state (to view a comprehensive listing of state coverage requirements then read the article:Minimum Auto Insurance Coverage Requirements).

Shop Around To Find The Cheapest Auto Insurance Policy

Once you know your state’s minimum auto insurance requirements then it is time to shop around. You can go around town speaking with your local insurance agencies trying to find the policy that best suits you (or you could save yourself some time and use our free quote shopping tool at the top of the page!).

If you do decide to travel to a storefront to purchase an auto insurance policy then while you are in the office try and look at some things that will give you a hint of how the company is. Are the insurance agents well-dressed? Do the customers seem happy when they approach the agents? How about the facility, is it nice and organized? If you can its good to ask some of their customers what they think in regards to the agency (and especially the agencies customer service).

Search Online For Cheap Auto Insurance

Of course, if you want to save yourself some hassle then you may want to search for your auto insurance policy online. If you use our free quote finder at the top of the page then you will be able to view quotes from the top companies offering coverage in your home zip code. Get started comparing rates and find yourself cheap auto insurance now!

Questions To Ask Yourself When Comparing Auto Policy Coverage Options

After you decide which company is right for you then comes the last part in the search for auto insurance. You will have to decide what type of coverage you are going to buy. Look for something inexpensive that still offers your comprehensive coverage at or above your state’s minimum required auto insurance level. Some questions to ask yourself during this process include:

Is my vehicle so old that it might need towing coverage?

Do I want just the minimum amount of coverage that the state requires or do I need something more?

Will there be more than one driver covered under my policy?

Does my car really need collision coverage?

Am I eligible for any discounts (auto/home discount, senior citizen discount, good grades discount, etc.)?

These are just some of the questions that will help you to decide which coverage options are best for you.

Find A Cheap Auto Insurance Policy Now!

If you do all of these things prior to making a decision on automobile insurance the result will be a well-balanced plan that is affordable and best suits your auto insurance needs.

Buying auto insurance should not be a scary thing; if you follow these guidelines you will be able to find the company and policy that that is best for you.

Use the tool at the top of the page to get started finding cheap auto insurance now!

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