Auto Insurance Basics

Property Damage Liability
This coverage is commonly called PD and covers property owned by another, whether that is the other vehicle or private property you might damage. It is best to have more than the state required minimum only because loss amounts could go far beyond the $5,000 or $10,000 lowest mandated amounts. Insurance advisors recommend having $50,000 or $100,000 Property Damage Liability coverage.

Personal Injury Protection
Personal Injury Protection coverage can be held to close scrutiny because you might have better coverage under a medical insurance plan through your work or business. Just be sure that you and your family are fully covered. If you have plenty of other health care coverage you can keep this to a minimum and save some money.

Uninsured or Underinsured Motorist
Even though almost all states require every vehicle owner to carry auto insurance, there are still thousands of scofflaws who go without it. Uninsured or Underinsured Motorist insurance covers you in case you are in an accident with someone with little or no insurance, or perhaps the victim of a hit and run where the culprit is never found. Recommended limits around $100,000 are considered reasonable.

Comprehensive and Collision
Nearly all financial institutions require Comprehensive and Collision coverage to cover the vehicle in case of a total loss. This coverage also helps in the event of a natural disaster, such as a tree falling on your car. In some cases it covers broken windshields, but you might want to keep a higher deductible to maintain a lower premium. Just be aware that you will have to come up with the deductible if a loss occurs. A good measuring criteria is if the price of Comp and Collision is over 10 percent of your vehicle's value, it may be time to consider deleting this coverage.


Those are the basics, however, remember that the best advice is to do your homework, shop around and get quotes from more than one company. You can go to the III website for good general information. One very important point is to get insurance lined-up before you go shopping for a new car. According to James Montalvo at Auto Mart, a dealer located in Northern California: "I have had a few folks who had their vehicles totaled within a few hours of driving their new car off the lot." Disaster strikes when you least expect it, so be prepared.