Auto Insurance Basics

Auto insurance is essentially two types of coverage: accident and theft. The accident part of it includes bodily injury liability, property damage liability, medical payments, collision, comprehensive, uninsured or underinsured motorists, and extras, such as towing or other roadside assistance. Bodily injury liability covers people in the cars who may be injured or worse. This coverage can include medical bills, loss of income, and other expenses for you and/or for the other driver and passengers.

Common Auto Insurance Terms

• Property damage liability covers things damaged by your car, such as houses, fences, and other types of property.
• Collision covers the damages to your vehicle and allows you to return your car to working order.
• Comprehensive insurance covers damage to your car if it is stolen or damaged in other ways, such as by flood, fire, or animals. In those cases, you would have to pay the deductible amount you have selected. Such coverage is often required by lenders or leasers.
• Uninsured/underinsured insurance coverage protects you against people who may not have auto insurance. Your insurance company would pay to have your vehicle repaired or replaced, then send its lawyers after the uninsured/underinsured driver to recoup the company’s costs.

Vehicle Theft

In terms of vehicle theft, common sense is the best deterrent. Always lock your vehicle, keep your keys on you, park in well-lit areas, have an alarm and vehicle immobilizer installed, and have a tracking system to help authorities locate your vehicle in case it is stolen. Many of those items are becoming commonplace from the factory, but operator common sense remains the flaw in the system. People either forget to lock their doors or leave the keys in the ignition. Of course, as manufacturers take steps to deter auto theft, thieves are becoming more adept at plying their trade. There are now electronic devices that can unlock vehicles regardless of what preventive steps are taken. That is why it is important to not leave your garage door opener in the car, because thieves can then easily gain access to your home. According to the National Insurance Crime Bureau, the 10 most stolen cars in the U.S. are:

1. 1994 Honda Accord midsize
2. 1998 Honda Civic compact
3. 2006 Ford F-150 pickup
4. 1991 Toyota Camry midsize
5. 2000 Dodge Caravan minivan
6. 1994 Acura Integra compat
7. 1999 Chevrolet Sliverado pickup
8. 2004 Dodge Ram pickup
9. 2002 Ford Explorer SUV
10. 1994 Nissan Sentra compact

One way to lessen your auto insurance cost is to purchase a combined home/auto policy. In that case, the costs are often reduced because the insurance company wants all of your business.