January 5, 2011

Creating A Perfect Car Insurance Policy

Creating a perfect car insurance policy involves balancing what you are willing to pay in car insurance in comparison to your personal needs. Most insurance policies contain state-required insurance, so it boils down to how much you will ultimately select. With respect to optional kinds of coverage, evaluate your individual situation and create a car insurance policy that's right for you.

Most states require bodily injury and property damage liability insurance coverage. Liability insurance provides coverage for other persons in case you are at fault for a car collision. Each state requires its own minimum limits, so it's up to you if you want higher limits of coverage. Generally, the more assets you own, the higher the amount of liability limits you should purchase.

Assess your need for medical payments coverage - generally called MP or PIP. Regardless of fault for a car collision, this coverage pays for your medical bills arising out of an accident. Some states give you the option to select your health care insurance as primary coverage; then look to this coverage as excess insurance. However, other states require MP or PIP as primary coverage. Talk to your agent about what your state requires and add in this coverage as you feel appropriate.

Evaluate your vehicle for collision and comprehensive coverage. If your vehicle is under a loan, the terms of the loan may require this coverage; otherwise this coverage is optional. If you drive an expensive vehicle that is only a few years old, talk to your agent about adding this coverage to your car insurance policy. Covering the repairs subject to a deductible may be well-worth the additional premium.

Rental reimbursement and towing are not required, but creating a perfect car insurance policy includes this coverage. If your vehicle has major damage from an accident, tow coverage pays for the transport of your vehicle to a repair shop. In case your car goes to the body shop for repairs, a rental vehicle is provided based on a daily allotment. It's a relief to have this coverage in case your vehicle is not operable, and you need alternative transportation to work.

Creating the perfect car insurance policy also considers uninsured and underinsured motorist coverage. This coverage becomes valuable in case an at-fault driver does not have liability insurance coverage or not enough. If you are seriously injured in a car accident, this coverage provides insurance for your pain and suffering and any incurred out-of-pocket medical expenses.

When creating your perfect car insurance policy, consult your agent about what your state requires and then evaluate your personal situation to build an appropriate car insurance policy for you.