Auto Insurance Coverage Characteristics to Look for

Auto insurance is pretty important, so you should always make sure that you are looking for certain coverage characteristics to ensure that your coverage is as good as possible. Without these characteristics, you may not be getting all that you paid for.

Auto insurance protects you from risk. In fact, it can be looked at as a form of risk management.

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While every single coverage factor is not absolutely essential, having them all is as close as you can come to car insurance perfection. So, if you want nothing but the best for your vehicle and your peace of mind, make sure your car insurance coverage embodies the following six characteristics.

Over State Minimums

The first characteristic of auto insurance coverage you should look for is pretty basic. Most experts would agree that having liability coverage that is over your state minimum amount is essential to ensure that you have enough coverage.

Every state has different minimum amounts of mandatory liability insurance, from Florida, which is the lowest, to states like Alaska and Maine with the highest.

However, the experts at the Insurance Information Institute assert that it is recommended for every driver to carry at least $100,000 for each individual and $300,000 for an entire accident for liability insurance.

States such as Maine and Wisconsin only require about half those amounts.

While you might not need quite that much coverage depending upon your particular driving situation, you do need to make sure that you have enough to cover you in the event of a serious accident. If you cause an accident, your insurance company will only pay out up to those amounts that you have specified. Anything after your insurance’s liability limits have been met will likely be your responsibility to pay.

Such a scenario might go like this: You have the most common minimum amount of liability insurance, which is $25,000 per individual and $50,000 for the entire accident. Half of the 50 states in the U.S. have this amount as the lowest amount of liability insurance required to drive legally.

While driving on the highway, one of the tires on your vehicle blows out. Due to your high rate of speed common on highways, your vehicle sideswipes one car carrying three people and crashes into a van carrying five people. Just for the ambulance ride to the hospital, and a full workup to check for any injuries at the emergency room, each of the eight people involved in the accident you caused averages $8,000 in medical bills.

Your insurance will only pay up to $50,000 for the entire accident, so you will likely have about $14,000 in medical bills for other people that you are responsible for. If you had higher amounts of liability insurance, then your insurance would pick up that bill.

Full Coverage

The next characteristic that you should look for from your car insurance coverage is full coverage. While liability coverage is important to pay for damages that you cause to others, full coverage is important to ensure that your damages are paid for.

The industry leaders at the National Association of Insurance Commissioners maintain that the only time you should consider dropping full coverage is if your vehicle is worth less than $1,000.

Full coverage generally includes collision and comprehensive. The first, collision, pays for damages to your vehicle sustained in an accident regardless of fault. Comprehensive, the second coverage, pays for repairs to your vehicle sustained in everything other than an accident; this includes damages from storms, from hitting wild animals, or even from theft.

Full coverage is important to have as most of us do not have the money to pay for thousands of dollars in damages to a vehicle or to replace a vehicle outright if it’s stolen or deemed a total loss. Both collision and comprehensive have a deductible, which is an amount that is your responsibility to pay when you file a claim. Another important characteristic is to ensure that your deductible is one that you can actually pay.

Additional options for full coverage might also include roadside assistance, towing, and rental car reimbursement. Unless you have an alternative solution for the high cost of towing or renting a car and the like, then these options should also be found in your car insurance policy as well.

Full of Discounts

Everyone likes saving money, so coverage that includes a lot of discounts is a surefire characteristic that you will want to have. Discounts are made to attract good drivers and reward those drivers who continue to avoid filing a claim.

While most car insurance providers offer an array of discounts, you want your coverage to have many different discounts for many different situations. The New York Department of Financial Services maintains that getting all of the discounts you are entitled to is one way to save money on auto insurance.

For instance, many insurers have discounts for safe drivers; the safe driver discount is pretty basic. However, some insurers expand that safe driver discount into a discount for safe young drivers and a discount for safe mature drivers.

While you might not qualify for those discounts at the moment, you might have a teenager who is approaching driving age in a few years, or you might be considered a mature driver yourself in a few years. Having those discount options that go above and beyond the norm are important for your future savings.

Money-Saving Innovations

Further characteristics that you want to look for in your car insurance coverage are those that are on the cutting-edge of innovation in the insurance industry. There are many car insurance providers out there, and many are good, basic companies. However, there are a few insurance providers who really strive to offer the newest products and latest technologies to help you save money and improve your insurance experience.

For instance, many companies have recently adopted options such as accident forgiveness and vanishing deductibles to improve their insurance and save customers money. Such options set some insurance coverage above the rest.

Another example of innovation is the use of car insurance apps for smart phones. Those car insurance providers who change and grow with technology are better able to serve their customers.

Furthermore, some companies are even allowing customers to install GPS tracking devices that monitor the drivers’ behaviors at the wheel. Such devices allow car insurance rates to be based on the safety of the drivers, rather than factors such as age, gender, or credit score.

Those insurance providers who utilize these tracking devices are giving their customers money-saving options that may very well usher in a new era of underwriting and car insurance.

Multiple Communication Options

Another area where you want multiple options as a characteristic for your auto insurance coverage is communication. Being able to reach your car insurance provider is of paramount importance. Similarly, receiving correspondence from your insurance company is also very significant.

You want your coverage provider to offer an array of communication options. These options for communication can include contact by phone, with an agent face-to-face at an office, through the regular mail, or through a website. In this day and age of digital communication, text messages, email, and a really user-friendly website are becoming more and more important.

This communication goes beyond mere contact. It also means a variety of ways to pay your bill, adjust your coverage, and file a claim.

Provided by a Stand-Out Company

The last characteristic that you will want to find as part of your coverage is that it is provided by a great company. It is no small feat to be a highly-rated car insurance provider! The website Wiser Drivers asserts that doing business with a reputable company is important to increasing your satisfaction with your insurance provider.

First, you want a company that has some experience and has weathered some tough times. Research the background of your car insurance provider; researching even before you buy is the best course of option.

You don’t want to choose a fly-by-night car insurance company just because they offered you the cheapest rate.

You also want a company that has strong financial and customer service ratings. Both characteristics ensure that your insurance provider will be there for you through thick and thin. Financial ratings indicate that a provider will be able to pay your claims despite a poor economy, changes in the market, or a tough year due to many claims from natural disasters. Good customer service indicates that the provider will not only be there to pay your claim, but that they will be helpful to you throughout the process.

While the above characteristics are a lot to live up to, there are many car insurance providers out there that embody just about all of the traits. Do some research and comparisons before you buy coverage, and you are well on your way to car insurance perfection!

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