Don’t Overpay for Required Auto Insurance
Types of Auto Insurance
Most states require auto insurance and without insurance in these states, it is not possible to register a vehicle and drive legally on any public road.
There are many variables affecting the cost of auto insurance. Sports cars, very expensive cars, and cars that are popular with car thieves will have higher insurance premiums because of their statistically higher risks. Drivers that have been involved in one or more accidents in the past 3 to 5 years or have had one or more moving violations in the same period will pay higher premiums. Some states require higher minimum coverage amounts that will also cost more.
Rates vary widely among insurance providers. Some insurance companies are known to offer more competitive rates for newly licensed drivers; others are valued for giving larger discounts to lower risk drivers.
Liability coverage is the foundation of all auto insurance policies and for states that require auto insurance, liability is the required minimum coverage. Liability coverage will only pay for property damage and injury caused by the insured driver or policy holder to the other accident victims. The insured at fault driver will not have insurance money to pay medical expenses for his own injuries or car repairs if he is at fault and only carries liability coverage. In the event a driver with only liability insurance is a victim in a car accident, and is not at fault, there will be no payment for injuries or damages if the at fault driver is not insured.
Having enough liability coverage is also very important. If a driver with the legally required amount of liability insurance is found to be at fault and the property damage and injury exceed the insurance coverage, the driver found to be at fault could be sued for more damages.
What Auto Insurance Pays For
Collision coverage pays for the insured vehicle damages caused by a collision with another vehicle or object. Collision coverage is the most expensive insurance and because of its cost, some car owners choose to do without collision coverage, especially if the vehicle is lower in value. Owners of expensive cars typically choose to pay the cost of protecting their investment in the automobile and pay the high premiums for collision coverage. Collision coverage is also required by auto financing companies.
Comprehensive coverage pays for losses due to theft, fire and vandalism as well as damage caused by anything other than a collision such as hail and wind damage.
Other kinds of auto insurance include medical payment or personal injury protection (PIP), uninsured or under insured motorist and rental reimbursement coverage.
PIP coverage will pay the medical costs of injury to the insured driver and the passengers of the insured car. PIP will also cover lost wages and pay for services normally performed by the person who is injured such as child care or housekeeping.
Uninsured or under-insured motorist will pay the policy holder, a family member, or the insured if the insured is hit by a driver with no insurance or not enough insurance. Damages by a hit and run driver that cannot be identified will also be covered. Uninsured motorist coverage will also pay the medical costs of the policy holder or family member who may be hit by an uninsured motorist as a pedestrian.
Rental reimbursement coverage reimburses the policy holder or driver the cost of a rental car while the damaged car is being repaired.
How to Get the Lowest Rates
Auto insurance prices are based on the area in which the policy holder lives, the driving record, and the type of care that is insured. Good driving habits and choice of car can make a big difference in insurance costs.
Insurance rates change frequently and are vastly different from one company to another. The first step in saving money on auto insurance is to get several quotes. Many people are able to save by combining auto insurance with renters or homeowners insurance. Raising the deductible which is the amount the policy holder pays before the insurance company pays the damages will always result in lower premiums.
Before making a final decision on any insurance provider, make sure deserved discounts for accident free driving, completion of a safe driving class, or installing anti-theft devices on the car have been factored into the insurance quote.