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(NUI) - Do you know how well your auto insurance policy would cover you, your vehicle or a third party if you were involved in an accident? Are you carrying enough or even too much coverage? According to a survey done by the Progressive group of insurance companies, most consumers don't take time to regularly review their auto insurance policy to be certain that it still reflects their needs. Having a better understanding of some basic auto insurance principles and terms could help you be certain you're protected - and could even save you money.
Auto insurance is complicated. Here are five things you should know.
1. Types of coverage. There are two general "types" of coverage available to you. One, generally referred to as first-party coverages, protects you and your vehicle. First-party coverages include comprehensive, collision and primary medical, including medical payments and, in some states, Personal Injury Protection (PIP). The second type, called third-party coverages, protects those to whom you might cause injury. Third-party coverages provide protection for bodily injury and property damage you cause to others.
2. Use your deductible to save money. If you purchase comprehensive and collision coverage, you'll be asked to select a "deductible" amount, that is, the amount you'll pay on a claim before the insurance company begins paying. When selecting your deductible level, consider how much you could afford in the event of a crash. Most people select $500 deductibles because a higher deductible helps to keep the overall cost of auto insurance down. According to the Insurance Information Institute, increasing your deductible from $250 to $500 can save you up to 20 percent on comprehensive and collision coverage.
3. Make sure your policy reflects your needs. Have you recently married, divorced, moved, or have a teenage son or daughter who is now driving? Speak with your independent agent or insurance company to be sure that the coverage you purchased still reflects your needs.
4. Prices vary. Auto insurance rates are based on each company's expected cost of doing business, which includes the cost of paying claims. The claims data used by each company generally includes the number of accidents and the cost of those accidents. And, the claims data used varies from company to company, which leads to a large spread in rates available to the same consumer for comparable coverages. In fact, in a study of rates provided to more than 100,000 consumers, Progressive found that the average difference in premium based on a six-month policy for the same driver with comparable coverages was nearly $600 from company to company.
5. Go online. A wealth of information is available on the Internet at sites like www.progres sive.com.
Learn more about auto insurance by visiting a Progressive authorized independent agent or broker, calling 1-800-PROGRESSIVE or logging onto progressive.com.
Media Release Date: 11/5/03