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Buying Auto Insurance
The provisions in auto insurance vary somewhat
across the nation, based on state laws
and
regulations. There are still some general
principles that apply virtually everywhere:
- Liability coverage pays for damages that you cause to others,
if you are judged to be at fault in an accident.
In most states there are separate premiums
charged for Bodily Injury coverage and Property Damage coverage.
- Physical Damage coverage pays for damage to your car. This
includes Collision coverage for damage incurred while driving.
Another type of coverage, traditionally known
as Comprehensive but may be called Other Than Collision coverage, pays for damage to or theft of
your parked car.
- Personal Injury Protection (PIP) pays for medical expenses incurred by you
in an accident. It also may include income
continuation benefits (if your injuries put
you out of work), death benefits and funeral
expenses.
- Many drivers buy too much physical damage
coverage and too little liability coverage.
If your car is wrecked in an accident or
stolen, your financial exposure is limited
to the cost of replacing the car. However,
if your driving results in serious injury
or death to another person, or if you cause
major damage to expensive property, you could
lose your home and your savings and your
pay may be garnished for years. Seek coverage
in line with your assets.
- If you decline to buy physical damage coverage
(which you should consider if you own the
car outright, with no loan or lease on it),
you may still receive compensation if your
car is damaged in an accident where the other
driver is judged to be at fault. Your insurer
should act on your behalf in such situations.
- If you have a choice among insurers, learn
what they do to customers who are
involved
in accidents.
- Some insurers try to drop those who file
a claim, or give them stiff increases
in
premiums. Even drivers involved
in an accident
but who were not at fault or who
had clean
driving records for years before
can get
rough treatment from their insurers.Consult
your state's insurance commission
for information
on state laws that govern insurers'
ability
to drop customers or hike their
premiums
after an accident.
- Also check information that the insurance
commission may have on customer
complaints.
Some insurers are notorious for
trying to
stall customers and avoid paying
legitimate
claims. There are a variety of
websites in
which customers sound off about
their experiences
with insurers and other companies
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