How do I buy car insurance company policies?

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Things to remember...
  • In 47 states, you are required to purchase a minimum amount of insurance before you can register your car and to drive legally
  • Personal injury protection is also commonly called “no fault” or PIP insurance
  • Car insurance pays for damages to property in addition to medical expenses related to injuries received in an accident
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Buying auto insurance is a simple process once you know what you are looking for and have compared policies from several companies.

Understanding basic car insurance is a matter of educating yourself about the different types of auto insurance coverage and what kind of financial protection they offer.

Our FREE auto insurance comparison tool can give you great quotes to compare when you enter your zip code above!

Understanding Auto Insurance

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In 47 states, you are required to purchase a minimum amount of insurance before you can register your car and to drive legally.

The purpose of auto insurance is to provide you with financial protection if you are involved in a car accident. Finding the most protective auto insurance company is beneficial for having the best coverage possible.

Car insurance pays for damages to property in addition to medical expenses related to injuries received in an accident.

Liability Insurance

Liability auto insurance provides protection for you if you cause an accident. It is mandatory auto insurance in most states, although the required coverage limits are very low.

Liability insurance pays for damages and medical expenses for the other person. However, it does not pay for repairs to your car or for injuries you or anyone in your car receives.

Since required coverage limits are very low, it is recommended that you purchase additional liability insurance if at all possible.

If your liability insurance limits are inadequate for the costs related to an accident for which you are responsible, you may be potentially sued for the remaining damage costs.

Be sure to know when to report a car accident to the insurance company.

Collision Insurance

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Collision insurance is not required by law in any state, but lenders require it if your car is leased or financed. Collision insurance pays for damages to your car if you are involved in an accident.

Collision insurance pays for accidents related to hitting another vehicle, buildings and guard rails. It also pays for damages that are the result of

It also pays for damages that are the result of hit and run accidents and for damages that occur if someone else is driving your car.

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Comprehensive Insurance

Comprehensive insurance is another form of insurance that lenders require if your car is leased or financed. Comprehensive insurance pays for damages that are the result of events other than collisions.

For example, if your car is damaged because of a hail storm or by a flying rock, it will be covered by your comprehensive coverage. Comprehensive insurance also covers your car is it is stolen or damaged by vandalism.

Personal Injury Protection

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Personal injury protection is required as additional insurance coverage by 14 states.

Personal injury protection is also commonly called “no fault” or PIP insurance.

It is also occasionally referred to as “medical expense” car insurance. PIP pays for medical expenses regardless of who is responsible for the accident.

It is also used to pay for expenses related to rehabilitation services, lost wages, and legal expenses.

Gap Insurance

Gap insurance is another form of voluntary auto insurance but is highly recommended if your car is leased or financed.

If your car is declared a total loss, you will be paid only for the value of the car at the time of the loss, not the amount of money you owe on the car.

Gap insurance provides payment for the difference between the depreciated value of your car and the amount of money you owe on your lease or auto loan.

Buying Auto Insurance Coverage

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You can buy auto insurance coverage from almost any car insurance company or independent insurance broker.

In most cases, if you do not already have coverage with that specific insurance company, you will be required to complete a policy coverage application and submit a down payment before your coverage will be considered to be in force and active.

Once your payment and application are received, they are processed by the insurance underwriting department.

They conduct background information checks on your driving record and motor vehicle reports. Additionally, they will conduct a credit report check.

In some cases, if your driving record shows accidents or tickets you have not reported to them in your policy application, your premium rate may increase.

Also, if you have poor or bad credit, this can have a negative impact on your premium rate and it may increase. If your rate will increase, you will be notified and your following payments will be adjusted.

Comparing Auto Insurance Coverage

It is a good idea to compare several auto insurance companies before deciding to purchase a policy. When comparing companies, make sure you are comparing the same level and type of coverage between companies.

Additionally, you should also compare the same deductible amounts, since this can have a significant impact on rates.

You can find out information about policy rates by talking with an independent insurance broker, who should be able to provide you with rates from several different companies.

Understanding what type of auto insurance you need and how much coverage you need is half the process when buying car insurance. You can also compare rates by visiting an insurance comparison website, where you can get quotes from several different companies very quickly.

Enter your ZIP code into our FREE car insurance comparison tool now!4

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