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Un-complicating auto coverage
What comes standard
- Dwelling
- Bodily Injury Liability
- Property Damage
- Medical Payments
Add-on protection & coverage
- Better Car Replacement
- Towing & Labor
- Rental Car Coverage
Customize with rental coverage
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It’s not always easy to know the difference between certain terms when it comes to insurance. Let’s clear up exactly what the most important ones mean.
Deductible
The initial amount you pay out-of-pocket before coverage kicks in. In most cases, you pay this upfront in the event of a claim, even if you were not at fault.
Premium
The total amount that you pay for an insurance policy. Pro tip: You can choose a lower deductible by paying a higher premium.
Liability
What you’re responsible for in the event of an accident.
Limit of liability
The maximum amount an insurance company can pay for coverage according to your policy. For more helpful definitions, check out our Insurance Glossary.
It can seem like there’s no rhyme or reason as to why your insurance rate is what it is, but there are several factors that help determine your coverage and price.
The basics:
Your age
Statistics tell us that certain age groups are less likely to have good driving behavior, and are therefore a higher risk to insure.
Where you live
From environmental factors to the number of cars on the road, where you live indicates a lot about what kind of risks you’re more likely to encounter. Even varying regional repair and medical costs determine this aspect of your rate.
The kind of car you drive
The age, condition, and safety features your car has all contribute to what determines your rate.
Your driving history
As you might guess, a good driving record can mean a better rate on your policy, whereas a history of accidents or other violations can mean a higher risk to insure.
A few universal things that contribute to rate increases:
- A notable spike in distracted driving incidents
- Higher medical & auto repair costs
- More drivers on the road
Look at similar policies
When comparing car insurance quotes, it helps to compare apples to apples; in other words, you want to be sure that the quotes you get are for identical - or at least very similar - auto insurance policies. Once you have a better idea of the type of coverage you’re looking for in a policy, this will be easy. To better understand coverage types, browse our car insurance coverages.
Know what policy features are included
Liberty Mutual lists all coverages and features in our policies. This helps you understand exactly what's included in your quote, and which items may have an additional cost, such as towing or car rental coverages. When you compare car insurance, make sure you're getting the coverage you need and the features you want.
Comparing similar coverage, limits, and deductible amounts
Put simply: More coverage + lower deductible = higher premium Less coverage + higher deductible = lower premium Also, be sure you're comparing the same coverage period, usually a 6-month or 12-month term.