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Find out here how to get good driver discounts on your auto insurance policy.

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How much auto insurance coverage to buy?

If you are looking for auto insurance for the first time, it can be very easy to get confused. The best way to save money on your auto insurance policy is to know what you need, and only buy what you need. Any insurance “how-to” guide will certainly tell you that doing your homework ahead of time will always be the most cost effective way to get low auto insurance quotes. Here we will discuss how much auto insurance coverage to buy, as well as how to take advantage of auto insurance discounts when you really do need more than the average auto insurance policy.

Before you get auto insurance quotes, always find out what your insurance requirements are. You want to first check your state requirements for this, as not all states operate the same. Every state requires liability insurance, and so you will need to have liability insurance as a minimum on your auto insurance policy. If your car is financed or leased, you also need to know what coverage your financial institution requires, as most often they require full coverage including comprehension and collision insurance in order to protect themselves.

Liability insurance is also called third party insurance and will cover any other person that is affected in a car accident for which you are found to be at fault, and this is what makes it mandatory. If you are in an accident and are NOT at fault, the other party’s liability insurance will cover any losses you sustain. Collision insurance then is designed to protect YOU in an accident whereby you are at fault. Comprehensive insurance is insurance that is geared to protect you against financial loss in all other events that do not involve collision – vandalism, acts of Mother Nature, theft, and the like.

Those three types of coverage are designed to protect you in most scenarios. As we discussed, liability is required, and collision and comprehensive sometimes are, but not all the time. If they are required for you, you can lower your premiums by adding deductibles to your policy that will lower your perceived risk to insurance companies. Other kinds of coverages you may hear about are Personal Injury Protection, Uninsured or Underinsured Motorist Protection, Rental Reimbursement, and Medical Coverage just to name a few.

Obviously, you don’t need all of these, but if you drive frequently, or have a history of claims or collisions, these options might be an advantage to you. More often than not however these types of coverage are limited to people who feel they need all of the “bells and whistles” on their auto insurance policy and can afford it as well.

If you do need a lot of auto insurance coverage on your policy, there are ways to lower your premiums without buying too much. You can get discounts by combining multiple policies, such as carrying health and car insurance from the same provider, or by adding riskier drivers as a secondary on another policy. Women also get discounts on car insurance due to collision statistics suggesting that women are safer drivers. In addition, driver’s education courses, anti-theft or security systems, and small engine vehicles will be other ways to get discounts.