Auto insurance is required for all drivers registering a vehicle. However, because the industry is full of unfamiliar terms and coverage is often complicated, many people do not fully understand their policy. The information below will help you read and understand auto insurance quotes so you can better compare them and choose the right coverage.
A Guide to Reading Your Auto Insurance Quote
1. Liability Limits
The declaration page of most policies includes a list of numbers separated by slash marks. These numbers refer to the policy's liability requirements. For example, Georgia is a 25/50/25 state, which means it requires drivers to maintain at least $25,000 worth of bodily injury liability coverage per injured person, to a per-accident maximum of $50,000. It also requires at least $25,000 worth of property damage liability. These amounts pay for damages you cause to others in an accident deemed your fault.
The deductible is the amount you must pay toward a claim before your insurer is obligated to contribute. The higher your deductible, the more money you'll have to pay out-of-pocket if you get into an accident.
However, the higher it is, the less risk your insurer undertakes in the event of an accident. As such, they'll charge you less for coverage, which means lower monthly premiums.
3. Actual Cash Value & Replacement Value
The amount you will receive as a payout in the event of a total loss claim is determined by whether your policy covers the actual cash value or the replacement value of the vehicle. The actual cash value is the original value of the car minus the amount it has depreciated over the years. The older it is, the less valuable it is.
Replacement value policies pay out the amount necessary to replace the vehicle with a similar make and model. It does not account for depreciation, so replacement value policies typically pay out more, but they cost more in monthly premiums.
For expert assistance designing an auto insurance policy, contact Stringer Insurance Agency in Dahlonega, GA. They have served clients in and around Lumpkin County since 1931. Their specialties include auto, home, health, and life insurance. Visit their website to message them online or call (706) 864-3515 for a car insurance quote.
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