When you start looking for auto insurance quotes, you may feel overwhelmed. There are dozens of insurance companies out there and they all claim to have great rates. It is difficult to wade through the policies and determine what you need and what you don’t. It doesn’t have to be that way, however. If you take your time and determine what your own personal needs are, you can find the auto insurance that is the right choice for your needs and budget.

A Well Informed Consumer

Most states have state minimums for car insurance, and you want to be sure that any auto insurance plan that you choose at least meets those minimums. The basic concept of auto insurance is to help protect you if you are in an auto accident. If you are in an accident with injuries and are found at fault, you could be liable for damages of $125,000 or more. If there was a fatality, this amount could go up to $6 million or more. This does not even consider damage to property, including buildings, other structures, and cars. This is why you need auto insurance.

Liability Insurance

Liability insurance is required in 47 states. The coverage limits are very low and in fact may not even be enough if the accident is a bad one, which is why you want to do your research. If you are responsible for an accident, you are liable for damages and injuries to other involved parties. Make sure that you have enough coverage to take care of this or you could be sued for damages, which could put your home or any other assets at risk.

Collision Insurance

Collision insurance is not mandatory if you own your car, but if you purchase a new or used car that you finance or if you lease a car, it is. This pays for damages to your car if you are in an accident. Additionally, if you hit a building, fence, or another structure, collision insurance will pay for repairs. If your car is involved in a hit-and-run accident, or an accident in which someone else is driving, collision insurance will also cover your vehicle.

OTC (other-than-collision) Insurance

OTC is another type of insurance that is not legally required, but if your car is leased or financed, you have to have OTC insurance. This coverage pays for damages resulting from events other than accidents. This includes damage from events such as hail, hitting a deer, vandalism, or theft.

Personal Injury Policy

This type of coverage is mandatory in 14 states. Personal injury policy involves, “medical expense” insurance, or “no fault” auto insurance is used to pay medical and hospital bills due to an auto accident no matter who is at fault. This type of coverage also covers rehab costs, legal expenses, and lost wages.

Compare Auto Insurance

Now that you understand more about what you need to look for, you are ready to search for quotes. Higher deductibles mean lower premiums, but you need to evaluate whether it is a deductible that you can come up with if needed. Lower deductibles mean higher rates, but make it easier to get your car fixed if you have an accident.

Insurance company websites are a great way to see other financial products that can be purchased, as bundling policies can often save money. By looking at several different websites and companies, you can get a better idea of the rates available to you. Be sure that you compare same policy limits to same policy limits. This is the only way for you to get a true comparison.

Making a Decision

Once you have your quotes, you want to submit your application and down payment. You will be notified when and if your policy comes into effect. A well-informed consumer can find an auto insurance policy that will fit their needs and their budget.