Many people go about making auto insurance comparisons completely the wrong way. They lack a basic understanding of the different elements that make up the policies they are comparing and as a result they end up missing some of the very important differences that exist in each policy.

So first off let us discuss liability insurance in general

Pretty much every state of America requires liability insurance by law. Nevertheless the actual minimum coverage amount required does depend on which state you happen to be in. It is absolutely essential to properly understand what these limits will mean to you as a driver.

$24,000/$50,000/$24,000; does this look familiar? Those numbers represent the most common way to represent the limits of this coverage. The first number represents the maximum body injury liability for each person in an accident, the second is the overall maximum counting all passengers in the vehicle and the third represents the maximum property damage liability.

For instance if we were to go on the numbers in the example above, in the case of an accident that was your fault, your insurance company would only pay out an absolute maximum of the figures used in the example.

In other words in this situation if the costs associated with the accident went beyond the pre-established limits of your policy you would have no choice but to pay the remaining costs yourself.

The uninsured/underinsured protection coverage

There’s always the risk of finding yourself in an accident with someone who is underinsured or simply does not have insurance at all. This is why there is an option available to have extra protection especially for these situations. You will of course pay more for this and have to pay a premium for it.

The comprehensive and collegian coverage type

Comprehensive and collegian coverage, also known as full coverage, will insure an individuals vehicle regardless of whether the accident is their fault or not. It also normally ensures the vehicle against other damage not cause in a car accident.

You can expect to end up paying quite a lot more for this insurance for obvious reasons. Properly assessing all other elements that make up this part of your policy is vitally important.

This coverage will appear in a format similar to $500/$500. This means that in the event something happens to your vehicle that is covered by your comprehensive or collision insurance, you will have to pay $500 per incident out of pocket and the insurance company will cover the rest.

Rental Reimbursement and Roadside Assistance

There are a number of optional coverage features that can be in a policy which people often miss. These additional options can actually make quite a lot of difference to the overall policy so they really do need to be looked into.

Rental car reimbursement will cover a certain amount (depending on the coverage selected) per day of rental car charges should your vehicle become unavailable for a certain period of time due to an accident.

Roadside assistance coverage allows the insured to receive a variety of emergency services (depending on the plan) for free or a reduced charge. A person having his or her car towed is one example of this type of coverage.

Medical Coverage

Each state in the United States has different requirements regarding optional and required medical coverage, for instance in some states you must have no fault medical so that you are covered regardless as to whether or not you’re at fault, however other states do not require this.

In the States where this is not required you will find that there is a certain minimum you must have but that is all. Again understanding and fully taking into account medical coverage is vital in order to properly compare your auto insurance quotes.

The bottom line is you must not do as so many do and just look for the cheapest price. You may end up paying more in a year sometimes for the insurance but overall it will end up being better in the long run when that unexpected accident comes up.

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