You kinda want to understand your car insurance coverages just so you don’t sound stupid when you call your insurance agents office, right?  But you don’t want to ask your agent because then you will really sound stupid.

Let’s do a mini review of car insurance coverages so that the next time you talk with your insurance agent you can have a real conversation with them versus just agreeing with everything and walking away dumb-founded.

One thing you definitely want to ask your agent a lot of questions about is your credit score.   Most insurance companies use credit scores when determining premiums; ask your agent if your insurance company does.   Then ask you agent to show you the differences in premiums with different credit scores.

Car Insurance Coverage|What You Need To Know

Optional Insurance Coverage

  • An example of an optional car insurance coverage would be car rental.
  • Another optional car insurance coverage is towing.
  • Neither car rental or towing is required by law or a finance company.
  • And you can limit or reduce these coverages to help lower your premiums.

Required Insurance Coverage

Liability Coverage

  • The insurance coverage required by law is liability.
  • Liability car insurance is a very important coverage.
  • It covers the other party’s damages from a car accident when it is the policyholders’ fault.
  • The damages will be paid for by the insurance company up to the limits stated within the policy.
  • Liability car insurance pays for bodily injury and property damage.
  • Each state law has a required minimum coverage for liability car insurance.
  • Check with your insurance agent for your states required minimum.

Comprehensive Coverage

  • This coverage is not required by law, but it’s good to have, especially if you have a newer car.
  • Comprehensive coverage replaces cracked windshields, repairs the damage to your car from a deer or if your car is keyed or hit by a shopping cart.

Collision Coverage

  • This coverage is not required by law, but also good to have.
  • Coverage under collision extends to your car if it’s damaged in a car accident.

Medical Payments

  • This will pay for your medical up to the policy limits.

Uninsured/Underinsured Motorist Coverage

  • This coverage will pay for property damage and bodily injury if you are in a car accident where the owner of the other car did not have any insurance or not enough insurance coverage.
  • This is extremely good coverage to carry.

Group Insurance

  • Some car insurance companies sell group auto insurance through employers at a discounted rate.
  • The car insurance coverages offered on a group policy are usually the same as individual policies.
  • The claim service and body shops used are usually the same.
  • The car insurance policy language is the same.
  • With a group policy the underwriting may be slightly different than on an individual policy.
  • And the insurance premiums on a group policy are usually cheaper – check with your employer.