How to Choose the Right Car or Motorcycle Insurance Policy

Choosing the right car insurance policy is a balancing act that often comes down to needs and preferences versus costs. How do you choose the best auto insurance policy for your specific needs? It's possible if you follow a few simple steps, including determining adequate coverage for your situation, a manageable deductible and a carrier you can work with. Here's what you need to know.

First, it’s important to understand three of the key components of an auto insurance policy:

  • Bodily Injury Liability Per Person: Coverage limit, per person, for the expenses, like medical bills and lost wages, due to injuries you cause to others in an accident.
  • Bodily Injury Liability Per Accident: Coverage limit for the expenses due to injuries you cause to others, in total for the accident.
  • Property Damage Liability Per Accident: Coverage limit for damages you cause to other people’s property in an accident, which could include cars, fences, etc.

Understanding Types of Insurance Coverage

Familiarize yourself with the available types of insurance coverage and what each one does. Focus on several core types of coverage that you should focus on:

  • Collision
  • Comprehensive
  • Medical or personal injury protection
  • Liability
  • Uninsured/underinsured motorist

Figure Out Your Insurance Needs

Knowing what you’re looking for is the place to start. Each state requires car insurance coverage at a different level, but what the mandatory coverage has in common between states is that it covers your liability and not your own vehicle damage costs.

The minimum you’re required to carry is known as “basic coverage” or “state minimum.”

Considering that most states require significantly less coverage than necessary to pay for the total loss of a new vehicle, you should consider purchasing higher limits even if you decide to only purchase liability coverage.

Compare Several Car Insurance Quotes

You can shop for insurance by going online, using the telephone or working directly with insurance agents. A report by Bankrate says getting multiple quotes is important because prices for the same level of coverage vary greatly. That happens because insurance prices are based on risk. Each carrier has its own formula for measuring the policyholder's risk for filing claims.

Some insurers rely heavily on insurance scores to determine how likely policyholders are to file claims. Other companies may give more weight to the type of car you drive and how expensive it would be to repair following an accident.

How to Select the Right Car Insurance Company

Beyond pricing and coverage, you should also look at an insurer’s reputation, as well as its claim processes. Some offer online- and app-based claims, which reduce post-accident hassle significantly.The bottom line is that comparing your options is critical. If you’re looking for the best coverage at the best price, use Credible to start shopping plans now. You’ll get free, personalized quotes from several insurers in minutes.

Motorcycle Coverage That Helps If You Cause an Accident

Most states require motorcyclists to carry liability insurance. Each state sets minimum liability limits that drivers must purchase.

Liability coverage typically does not pay for your own medical bills after an accident or repairs to your bike. Instead, it may help pay for someone else's medical bills or damage to their property if you're at fault for an accident. There are typically two types of required liability coverage:

  • Collision: Pays out for damage to your motorcycle, minus your deductible amount. A deductible is the amount you select when you buy your policy that’s deducted from a claim check.
  • Comprehensive: Pays out if your motorcycle is stolen or damaged by something other than a collision with another vehicle. Animal collisions are covered. A deductible applies.