Car Insurance Quotes: How To Understand Them | Bankrate.com

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Bodily injury liability / Property damage liability

The two types of liability coverage offer financial protection when you cause injuries or property damage in an accident.

Your bodily injury liability coverage is expressed in two dollar amounts. The first represents the maximum payout per person in an accident. The second represents the total possible payout per accident.

Tip: Most people grossly underestimate liability, says State Farm agent Kevin Conroy Smith, who tells clients to remember that their home or other assets could be on the line if they cause a serious accident.

Bodily injury liability / Property damage liability

The two types of liability coverage offer financial protection when you cause injuries or property damage in an accident.

Your bodily injury liability coverage is expressed in two dollar amounts. The first represents the maximum payout per person in an accident. The second represents the total possible payout per accident.

Tip: Most people grossly underestimate liability, says State Farm agent Kevin Conroy Smith, who tells clients to remember that their home or other assets could be on the line if they cause a serious accident.

Personal injury protection, or PIP

Personal injury protection pays for medical expenses and lost wages for you and your passengers hurt in a crash.

Tip: Insurance broker Billy Van Jura says PIP coverage is likely to come into play before your health insurance and pay faster in the event of a crash injury.

Comprehensive

Also known as "comp," this coverage pays for damage to your car from something other than a collision, such as theft, natural disasters or an animal charging at the vehicle.

Tip: If you own your car free and clear, and it's more than 4 years old, full comprehensive may not be worth it, says Smith.

Deductible

The deductible is what you'll pay out of pocket on a collision or comprehensive claim. High deductibles can mean lower premiums.

Tip: Van Jura says if you're considering a high deductible, think: Are you comfortable paying for dings, dents and other minor damage on your own? If you have a bad accident, will you be able to write a check for the deductible amount?

Collision

This coverage takes care of damage to your car from accidents with other vehicles or objects such as freeway dividers.

Tip: As with comprehensive, collision coverage may not be worth the cost if your car is old and easily replaceable, Smith says.

Deductible

The deductible is what you'll pay out of pocket on a collision or comprehensive claim. High deductibles can mean lower premiums.

Tip: Van Jura says if you're considering a high deductible, think: Are you comfortable paying for dings, dents and other minor damage on your own? If you have a bad accident, will you be able to write a check for the deductible amount?

Uninsured/underinsured motorist

Also known as UM/UIM, these coverages provide compensation for injuries if your car is hit by a driver whose insurance is lacking. When two dollar amounts are given for UM/UIM, the first is the maximum payout per injured person in your vehicle, and the second is the maximum payout per accident.

Tip: You don't want to go without this type of coverage, because the risks are too high, says Smith.

Stacked/non-stacked

"Stacking" multiplies your UM/UIM coverage limits by the number of vehicles on your policy, to beef up your potential coverage in an accident. Not all states allow stacking, which comes at an additional cost.

Medical payments

This coverage pays for accident-related medical expenses -- including health insurance deductibles -- for you and your passengers, regardless of who was at fault in the crash.

Tip: While medical payments coverage is tapped relatively rarely, Van Jura says it doesn't drive up premiums all that much and can be a cheap way to bulk up your car insurance.

Emergency road service

This coverage option pays for any towing, roadside assistance and locksmith services you might need.

Tip: If you have AAA or roadside service through the car manufacturer, this coverage probably isn't a good value. But, Van Jura says, "Every driver should have some level of emergency road service."

Car rental

This reimburses you for the cost of a rental if your car is not drivable due to an accident or other covered loss.

Tip: If you can make arrangements to temporarily get around without your car, you probably don't need rental coverage. If you do get it, make sure it pays at least $50 per day, says Van Jura.

Deductible

It's what you'll pay out of pocket on a collision or comprehensive claim. High deductibles can mean lower premiums.

Tip: Van Jura says if you're considering a high deductible, think: Are you comfortable paying for dings, dents and other minor damage on your own? If you have a bad accident, will you be able to write a check for the deductible amount?

Stacked/nonstacked

"Stacking" multiplies your UM/UIM coverage limits by the number of vehicles on your policy to beef up your potential coverage in an accident. Not all states allow stacking, which comes at an additional cost.

Source: http://www.bankrate.com/finance/insurance/car-insurance-quotes-how-to-understand-them.aspx

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