August 24, 2011

The 3 Most Expensive Types Of Car Insurance Coverage

The cost of car insurance coverage is a moving target. Not only do the numerous available coverage options have an effect on premium rates, they are also subject to additional changes over time for various reasons. Considering the variables, under normal circumstances the most expensive car insurance is collision, followed by liability and comprehensive. In fact, the most expensive car insurance policy can be virtually any policy with numerous options or one that is issued to a person with a very poor driving record.

The realities of auto insurance premium costs are driven not as much by the basic type of car insurance coverage that you choose as by the specific details of your driver profile and the options you add to your policy.

There are some exotic car insurance policies that carry extraordinarily high premiums. Extremely valuable cars command very high premiums for collision insurance. The best example of this is collision insurance for a rare, collectible Duesenberg that is driven on the road. That can cost tens of thousands of dollars a year in premiums. Commonly, the cost of collision insurance is a function of the value of the insured vehicle. Under ordinary circumstances, this would be the most expensive car insurance that is commonly available.

In more general terms, the most expensive car insurance depends on what you drive, how you drive and where you live. In addition to collision, there are two other basic types of car insurance coverage: comprehensive and liability.

Comprehensive car insurance coverage pays for damage to your car that is not caused by another driver. Examples are vandalism, storm damage or a tree falling on your car. It is comparatively low cost car insurance coverage. This too, however, increases in cost with the increased value of the insured vehicle and, therefore, can become an expense that must be considered. Comprehensive car insurance coverage is optional but, if your car has significant value, it is advisable to take advantage of it.

A minimum amount of liability insurance is required by law in all states. The more coverage you choose, the higher the premiums will be. Generally, the range of protection tops off at one million dollars but can be higher. Rates for this type of coverage vary among companies but remain somewhat constant industry wide, depending on the value of the policy. In this case, the car you drive has little if any effect on the cost of your premiums.

The cost of all types of car insurance can increase due to factors such as the age and driving record of the driver, where the car is parked, the city in which the driver lives and the value of the car.