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3 Tips For Buying Your First Auto Insurance Policy

Friday, July 30th, 2010

Buying your first auto insurance policy can be a very confusing experience. Here are three tips to assist you in this process: educate yourself on basic auto insurance terminology, know what kind of coverage you will need, and compare different auto insurance quotes before making a final decision.

Car insurance policies are written in languages specific to the insurance industry. If you are buying your first auto insurance policy, it may be filled with a lot of words you have never seen before. It is very beneficial to understand the definitions of some of the most common terminologies. You need to understand the language of the auto insurance industry before you can proceed with an informed decision.

The following are a few of the terms you may find in auto insurance quotes. A Personal Auto Policy is the basic auto insurance policy most commonly issued. The Insured is the person covered by the insurance policy. Personal Injury Protection is coverage for the insured resulting from an accident, regardless of who is at fault. Policy limit is the maximum dollar amount a policy will pay out in a claim. Personal liability is the insured’s obligation to another party.

Secondly, know what kind of coverage you will need before purchasing your first auto insurance policy. There are legal obligations a vehicle owner is required to have for auto insurance coverage. There are two big factors in making this determination: state laws and auto loan holders.

The legal requirements for carrying auto insurance differ from state to state. Find out what the laws are in your state to ensure compliance. If you have borrowed money to purchase your car, or if you have leased your car, the lender will typically require you to carry specific coverage on your policy until the loan has been paid in full. Failure to comply could result in legal issues and possible revocation of your state driver’s license.

Lastly, shop around before making a final decision. Compare different auto insurance quotes from a few companies. Don’t simply go with the lowest quote. The lowest quote could be a policy with poor or inadequate coverage. Be sure you have the coverage when you need it.

When you’re shopping for your first auto insurance policy, these useful tips will help ensure you have the proper coverage. With knowledge of coverage options and insurance terminology, you will be able to compare auto insurance quotes and make an informed decision.

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