Thread: Understanding Car Insurance

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Introduction One of our favorite hobbies that we all share are a passion for cars. Along with the privilege of owning these fine cars and enjoying their benefits, is the responsibility of auto insurance.

Auto insurance.
It will make you, or break you.
It can help, or it can hurt.
It can be your best friend, or it can stab you in the back,
and whether we like it or not, we need it as part of life.

Not everyone is familiar though with his or her auto insurance declarations page, and that's were I aim to educate you.
What's in an Auto Policy? 1. Bodily Injury Liability
For injuries the policyholder (insured) causes to someone else.

2. Medical Payments or Personal Injury Protection (PIP)
For treatment of injuries to the driver and passengers of the policyholder's (insured's) car.
At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in auto accident.

3. Property Damage Liability
For damage the policyholder (insured) caused to someone else's property.

4. Collision
For damage to the policyholder's (insured's) car from a collision. The collision could be with another car, a light post, fire hydrant, etc.

5. Comprehensive
For damage to the policyholder's (insured's) car that doesn't involve a collision with another car. style="mso-spacerun: yes"> Covered risks include fire, theft, falling objects, missiles (believe it or not), explosion, earthquake, flood, riot and civil commotion.

6. Uninsured Motorist Coverage
For treatment of policyholder's (insured's) injuries as a result of collision with an uninsured driver. Underinsured motorist coverage can also be included in an auto policy.

Underinsured motorist coverage comes into play when an at-fault driver has auto liability insurance, but the limit of insurance is inadequate to pay for your damages.
Each state requires that you have certain types of coverages with minimum liability limits.
The insurance industry recommends that your bodily injury liability limits be $100,000 per person and $300,000 per occurrence. Saving Money on your Auto Insurance 1. Comparison Shop.
Prices for the same coverage can vary by hundreds of dollars from company to company, so it pays to shop around. Surf the net, ask your friends or call your state insurance department for ideas about companies and agents to contact. You should get at least three different quotes. But don't shop price alone. The insurer you select should offer both fair prices and excellent service. Quality personal service may cost a bit more, but provides added conveniences, so talk to a number of insurers to get a feeling for the quality of their service. Ask them what they would do to lower your costs.
Check the financial ratings of the companies with A.M. Best or Standard and Poor's.

2. Ask for Higher Deductibles.
Deductibles represent the amount of money you pay before you make a claim. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your costs substantially. For example, increasing your deductible from $250 to $500 could reduce your collision and comprehensive cost by 15% to 30%

3. Drop Collision and/or Comprehensive Coverage’s on Older Cars.
It may not be cost effective to have collision or comprehensive coverage’s on cars worth less than $1,000 because any claim you make would not substantially exceed annual cost and deductible amounts. Auto dealers and banks can tell you the worth of your car.

4. Buy a "Low Profile" Car.
Before you buy a new or used car, check into insurance costs. Cars that are expensive to repair, or that are a favorite target for thieves, have much higher insurance costs.

5. Take Advantage of Low Mileage Discounts.
Some companies offer discounts to motorists who drive fewer than predetermined number of miles a year.

6. Consider Insurance Cost When Making a Move.
Costs tend to be lowest in rural communities and highest in cities where there is more traffic congestion.

7. Find out about Automatic Seat Belt or Airbag Discounts.
You may be able to take advantage of discounts on some coverage’s if you have automatic seat belts and/or airbags.

8. Ask About Anti-Lock Brakes.
Anti-lock brakes improve steering control and stability when a car is brought to a stop, thus reducing accidents. Some states, including Florida, New Jersey, and New York, require insurers to give discounts for cars equipped with the brakes and some insurers have a nationwide discount in place.

9. Inquire About Other Discounts.
Some insurers offer discounts for things like no accidents in three years, drivers over 50 years of age, driver training courses, anti-theft devices, good grades for students, having more than one car insured with that company, or having more than one insurance policy with that company. So you see? Insurance isn’t that bad after all!
Oh, and some other bits of information:
It is illegal for insurance companies to base premiums on age. The reason all young drivers have high premiums though is because it is based on experience. You could be a 50-years-old, and just get licensed, and pay the same as a sixteen-year-old. But, most insurance companies recognize three years as adequate time for you to gain the experience you need to drive safely.

I hope this article has provided the basics of insurance in a clear manner. Believe me though, it can be quite complicated at times. Till next time!

Some good stuff here. thanks