Your car is no doubt one of the most important possessions you have. Not only can it get you to various places, it can take you to work, bring and fetch your kids to and from school, shop for groceries and get the family to go on vacations together. It also serves a lifesaving role in the event that someone has to be brought to the hospital right away.
You probably know your car quite well. Stuff like its model and make and the amount of fuel it consumes in a week are information you can give without hesitation. You might even know what its quirks are and the sound it makes if you step on the gas too much. But chances are, you probably don’t know much about your car insurance coverage. Chances are, you treat it only as a matter, of course, and have only taken a cursory look at it once and stashed it away to be forgotten only to be remembered if you need to make a claim because some rowdy kids decided your car provided good background for graffiti.
However, you should start learning more about car insurance because of a good number of reasons. First of all, the law requires that you should have some kind of coverage. You should know its required minimums, at least, so that you can comply and not run afoul with the law. Another reason is that car insurance will affect your budget. If you want to save money on car insurance, you should determine the kind of coverage you need for the car you are driving and your driving habits. There is no sense in paying more premiums than necessary for as long as you know exactly what you want in an auto insurance coverage.
It’s also not a good idea to go without car insurance completely. Nor is it a good idea to get insufficient coverage. If you do get in an accident and don’t have enough coverage, you’d still have to shoulder the remaining cost yourself and that can be quite expensive. Thus, your car insurance coverage should just be enough so that you can protect yourself financially in case of accidents.
There are different types of auto insurance coverage that will give you a more in-depth understanding of auto insurance.
There are different kinds of car insurance coverage that states may require. There are others that they leave to the discretion of the car owner to get or not. It’s important to know what kinds of coverage are required in your state and which ones are optional.
This type of coverage pays for accidental bodily injury and damage to property of other people involved in the accident when you are responsible for the crash. It pays for damages sustained by the driver and passengers of the other vehicle. It also pays for the damages sustained by the other vehicles involved. In the event that you are sued because of the crash, the insurance will shoulder the costs for the trial. States require minimum coverage but it’s always a good idea to get more than the prescribed minimums.
This kind of coverage pays for damage to your car in the event that it collides with another object or vehicle. A deductible is typically present for this kind of coverage.
This gives coverage for the medical expenses you, your passengers or even your household relatives sustain as a result of a car crash. The payment is given regardless of who caused the accident. You can also claim medical payments coverage if you get hit by a vehicle while walking. In some states, personal injury protection or PIP is required instead of medical payments coverage. In addition to paying for medical expenses, it can also provide coverage for funeral expenses, loss of income and related costs because of the injury sustained in the automobile crash.
This kind of coverage is for the damage or loss sustained by the covered vehicle that does not involve any car accident. For example, if the car gets burned, vandalized or burglarized, comprehensive coverage kicks in. It also includes losses or damages caused by natural calamities like hail, wind and flood.
There are other kinds of insurance coverage. For example, uninsured motorist coverage covers the damage sustained by your car in case you get involved in an accident caused by a driver who does not carry liability insurance. There is also underinsured motorist coverage for those times when the driver who caused the accident does not have enough liability coverage.
Keep in mind that the various types of coverage are brought together in many insurance policies.
The cost of auto insurance is not the same for all cars. There are different factors that affect the price of your premiums. Because there are many auto insurers in the market, it’s a wise idea to compare quotes from reputable firms before deciding on a policy to purchase.
First of all, your insurance cost is going to be affected by the type of car you drive. Sports cars, luxury cars and generally speaking, more expensive cars are going to cost more to insure than a dependable sedan for the entire family. Thus, you might want to choose an insurance-friendly car if you want to lower your car insurance premiums.
The place where you live is also going to matter on how much your car insurance will cost. The cost of car insurance is generally higher in cities than rural areas due to the higher incidences of accidents in urban places. Also, if you live in an area where vandalism or burglary is rampant, you can also expect to pay more for your premiums.
The third factor that will affect your insurance premiums is the frequency of your driving. Since those who drive more often are statistically more prone to road accidents, their premiums are going to be higher compared to those who only use their vehicles occasionally. If you also live far from your workplace and use your car to get to work every day, you can expect to be charged higher than a colleague who lives in the same area as you do but chooses to commute by public transport to work every day.
Another factor that will drive your insurance rate higher has to do with your personal information. Younger drivers can expect to pay more because research has shown that they are more prone to accidents. If you’ve had a record of driving violations in the past, you can expect to pay higher premiums as well. Strive to be a careful driver so that you will be able to bring down your insurance costs the next time you renew your insurance.
Before buying car insurance, you want to evaluate what you need so that you will have the right kind of coverage. This can be a bit confusing so here are some tips to guide you through the process:
1. If you have more assets, consider getting more coverage. You risk losing a lot more if you are found liable of causing an accident and don’t have enough coverage for your needs. The policy you have should protect your other assets from claims in case you cause a car crash.
2. For newly-bought cars, comprehensive and collision coverage is often required by the bank handling your loan. However, if you have an older car or a car that you own yourself, you can consider whether comprehensive and collision coverage is needed.
3. You can lower your premiums if you opt for a high deductible policy. A deductible is the amount that you must pay from your own pocket before the insurance starts shouldering the remaining cost. However, you have to make sure that you have this deductible amount set aside should something unfortunate happen.
4. You must have medical payments coverage if you don’t have health insurance or feel that your health insurance is not enough. This way, the policy will cover your medical bill in the event of an emergency on the road.
5. Consider getting higher liability coverage limits if you have children who are already able to drive. Because they are still new to driving, the possibility of accidents remains high. Thus, it’s a good idea to increase the liability coverage on your insurance policy.
6. Ask for discounts. Before purchasing coverage, ask the insurer for possible discounts that you could qualify for. Senior drivers who fit their cars with recommended safety features are given discounts while those who keep their driving record free from traffic violations may also be eligible for lowered premiums.
Whatever you do, it’s important to always have coverage. If you feel that you can’t afford car insurance but have a car, don’t make the mistake of not getting any or canceling your coverage. Get the minimum coverage required by your state instead so that you have at least some form of protection in case of accidents.
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