When you purchase auto insurance can be confronted for the first time be confusing. If so, do not feel bad. Auto insurance is a complex area. Read on for some tips for first time car buyers of insurance.
Start by researching the market online. It is much more efficient because, with a few clicks, you can review many competing providers. You don't have to sit through the selling speeches of several agents. In addition, online prices are better since the overhead for the insurer is less.
You will need to understand your needs before you can select a company. To do so, you first have to understand the three major categories of car insurance.
Third party only, sometimes called liability, insurance extends protection to others in the event you are at fault in an accident. It covers damage to their cars and other property, as well as medical expenses and usually loss of wages. This is the minimum type of coverage and does not protect your car or contents. It is required insurance in most areas.
Comprehensive insurance takes care of damage to your car due to reasons other than collision. This includes fire, theft and natural disasters. It often includes the contents as well as the car itself. The term full comprehensive means a combination of third party and comprehensive coverages.
Collision insurance covers your car in the event you are at fault in an accident. If you carry a loan on your car, your lender will probably require that you have collision and comprehensive coverages, not just third party.
These are the three main categories. There are many other types of car insurance that are sometimes listed separately and sometimes written into one of the above three categories. These include, but are not limited to, towing and roadside service, lost key replacement and uninsured motorist insurance, which covers you in the event the other party is at fault but is uninsured.
Each category of insurance will have upper limits of coverage, which can be increased for an additional premium amount. Most coverage types also have a choice of the deductible level. This is the amount you pay first, before the insurance pays anything. The higher the deductible, the lower your premium will be.