Auto Insurance -- How To Get Covered Without Breaking the Bank

WILMINGTON, N.C., Feb. 28, 2012 /PRNewswire/ -- In the current economic client it's important to save money everywhere possible, however, car insurance coverage is one of those expenses that a driver may regret skimping on in the event of an accident, injury or other claim.

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As with any type of insurance coverage it's important for policyholders to have enough coverage without being over insured.

To ensure that they are properly insured in the event of an automobile claim, policyholders should talk to an insurance agent to find out what type of limits they have on their liability coverage. This is the portion of an auto policy that covers property damage and bodily injuries sustained by another driver and vehicle in the event of an accident where the policyholder is found to be at fault.

Liability coverage is required to be carried by all motor vehicle operators and minimum limits are set by the state. Liability coverage is often expressed as a ratio, for example, 100/300/50. In this example, the policyholder's coverage would include up to $100,000 per person for bodily injury; $300,000 per accident for bodily injury; and $50,000 per accident for property damage. 

Oftentimes the minimum state-required liability coverage is not sufficient in the event of a major accident. Talk to your insurance agent about their recommendations and ask them to compare your insurance rate options for the different coverage limits. Oftentimes increasing liability limits does not make a huge premium difference and you may be able to avoid the additional cost by packaging your renters or homeowners insurance policy with the same company and receiving a discount.

Keep in mind that liability coverage does not include injuries sustained by the at-fault driver and their passengers. Therefore another important coverage to purchase is Medical Payments Coverage which provides compensation for bodily injury and property damage sustained by the driver and their passengers. Recommended limits vary for Medical Payments coverage but it is advised that all drivers carry this type of coverage in order to be properly protected.

Comprehensive and collision coverage (also known as "full coverage") is the portion of an auto insurance policy that protects a driver's own vehicle in the event of an accident or other claim. The comprehensive portion of an auto policy provides coverage for claims that involve theft, fire and vandalism amongst others. The collision portion of a policy protects policyholders in the event that they collide with another object on a roadway and sustain damage to their vehicle, for example, if a driver were to accidently hit a mailbox or telephone pole. Full coverage is not required at the state level, however, if you have a lienholder on your vehicle (the bank that holds your auto loan) they will probably require you to carry full coverage at all times.

Other types of coverage that drivers often carry are uninsured and underinsured motorists coverage which protects them when they are involved in an accident with a driver who is either not insured, under insured; or commits a hit and run.

Finally, some drivers opt for extra protection in the event of an automobile claim including rental reimbursement and towing coverage. These types of coverage are not typically required but can pay off in the event that a policyholder is involved in a major accident and needs alternate transportation while repairs are being made.

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SOURCE HomeownersInsurance.com