Auto Insurance
Unfortunately, most of us probably will be in a car accident at some point. Do you know what factors determine how much you’ll pay for your auto policy? It’s important to be sure the policy you choose fits your needs, and to know what information insurance companies use to figure out how much you’ll pay.
Most people know that tickets and at-fault accidents are likely to increase their policy’s cost. But the price of an auto policy price can be based on many factors, including:
- Where you live and how much you drive: City drivers can expect to pay more than those in rural areas. How much you usually drive your vehicle will also factor into your policy’s cost.
- What you drive: A vehicle’s safety record and its value are big factors.
- Who you are: Younger drivers are considered higher-risk by the auto insurance industry and risk usually equals cost. Credit scores area also taken into consideration; the better your credit, the lower the cost of your insurance.
- Who else is on the policy: Anyone else included on your policy will affect the cost of premiums, too, with all the above factors applied to them, as well.
It’s also important to know what kind of coverage you’ll be paying for. There are several different kinds, including:
Liability
This covers damages caused by your vehicle, including bodily injury or property damage. The amount of coverage varies by policy, but we generally recommend our clients carry at least $100,000/$300,000 for bodily injury and $100,000 for property damage.
Uninsured/ Under-insured driver
Although the state of Michigan requires all vehicles to have minimum bodily injury coverage, this minimum coverage might not be enough to pay for damages that other drivers inflict on you. And there’s always the chance you’ll be in a collision with another driver who is illegally uninsured. This portion of your policy pays for damages caused to your vehicle by an uninsured or under-insured driver.
Personal Injury Protection (PIP):
This auto insurance coverage pays the medical expenses if you’re injured in an accident. PIP coverage will be either excess, meaning the auto insurance company will pay for any excess medical expenses that your health insurance doesn’t cover, or full, which you’ll need if you don’t have health insurance.
It’s important to note that Medicare and Medicaid do not cover medical expenses from automobile accidents. If you have Medicare or Medicaid, you’ll need the full PIP coverage on your auto policy
Collision:
This coverage pays for damages to your vehicle, whether it comes from another vehicle, or if you cause the damage yourself. For instance, if your car slid off the road while you were driving and struck a guard rail, collision insurance would cover those damages. Be sure to ask about the different types of collision insurance available.
Comprehensive:
Also known as “other than collision”, comprehensive insurance covers a number of different situations that may affect your vehicle, such as a fire, a theft, vandalism, broken glass, falling objects, and one that Michigan drivers deal with all too often: car vs. deer accidents.
Note that comprehensive and collision are both optional. But if you have a loan or a lease on your vehicle, your lender however, will require you to carry both on your policy.
Road service/towing:
This provides coverage for having your vehicle towed if it is incapacitated, for having a tire changed, or if your vehicle runs out of gas.
Rental car:
This covers the cost of a rental car while your vehicle is at a shop being repaired following an accident.
Whatever kind of insurance you think you need, or if you aren’t sure, call Bronson Business today. Our insurance agents will help choose the auto insurance that’s best for you, to get you on the road and on your way!
