This is the first time ever that I am shopping for my very own auto insurance here in Dundalk, Maryland. I was advised that I should get higher deductible to save money and that I may opt not to have collision coverage since I have an older car, what do these things mean?

Carolyn

Dundalk, MD

You could get a lot of savings on your auto insurance in Maryland if you have higher deductible. The deductible on your auto insurance would be the cost that you have to shell out from you own pocket before your auto insurance provider starts paying the remainder. So this means that you pay a small amount in case of an accident and your auto insurance provider pay for the weighty bumps. For instance, if the deductible on your auto insurance is $500 and the damage of an accident you are involved is $2000, you would have to pay $500 and our insurance provider would have to pay $1,500. But you can have a deductible of $1,000 because this could nonetheless protect you from great losses, but it could lessen you premiums by as big as 30%.

Collision insurance would pay for the damage on your vehicle from any collision such as with another vehicle, light post or even a mailbox. Since you have an older car and if it is not that valuable, you may choose not to have collision coverage. If your vehicle’s value is less than $200, you will likely pay out more having a collision coverage that its value. After all, you are driving an older vehicle to save some money, right?

I’m looking at my sister’s auto insurance policy here in Columbia, Maryland and I need help in understanding it because I will buy my own auto insurance soon. How would I know how much liability coverage she has on her policy?

Tara

Columbia, MD

It would be easy to find out how much liability coverage your sister has on her auto insurance in Columbia, Maryland. This is typically shown as three numbers which are written like this – 25/50/25. This would mean that it would pay $25,000 for physical injury or medical costs per person, $50,000 for physical injury or medical costs per accident and $25,000 to cover for property damage for every accident she may have.

You must realize though that if you will be involved in a serious car accident, the minimum liability auto insurance coverage would likely not cover all the costs. It would be a good idea to purchase more so that you could be sure to have the appropriate coverage in case of a serious accident, which generally means major bills. It would also be a wise decision to buy more than the minimum especially if you own a home, have a huge savings account or have a real estate. The injured party can sue you if you were the one who caused the accident, and if they do, you can keep the courts from going after your personal financial business if you have enough liability insurance.