Learning the Basics of Auto Insurance
It can seem pretty overwhelming; there are a lot of things to think about when it comes to getting the right coverage for you and your automobile. Drivers are now required to have automobile insurance to be on the road, but knowing what kind of insurance to get, so that your car will be covered sufficiently, but that you can still afford to drive it can be a bit tricky if you aren’t at least a little bit educated on the topic.
Aside from our houses, our cars are often the most valuable and necessary material belongings in our possession, it’s important for all drivers to begin learning the basics of auto insurance if they don’t know them already, so they can hit the road with confidence and piece of mind.
Liability
Having at least some liability coverage is a requirement for driving in all states, the minimum amount necessary does vary a bit from state to state, but it’s good to have more than the minimum amount of coverage in the event that you are involved in a serious accident.
The two sections of liability coverage cover bodily injury and property damage.
Bodily injury liability will cover the medical expenses and potentially the lost wages of people injured during an automobile accident. If your liability coverage is too low to cover the medical expenses of a person you injure in an accident, you may be held responsible for the remainder of the money due – this is precisely the reason that higher liability coverage is better than lower liability coverage.
Property damage covers the cost of repair the damage you do to other peoples property in the event of an accident, this could include their automobile, their motorcycle, bicycle, house or whatever else happens to be on the receiving end of the accident.
Comprehensive and Collision
If you own your car outright, then neither comprehensive or collision coverage is a requirement to operate your vehicle, but depending on your driving record or the neighborhood you live or work in, it may be advisable to at least carry some comp and collision coverage.
Collision will cover the damage sustained to your car in the event of an accident that you are deemed the cause of. The amount of your chosen deductible and the level of your collision coverage could have a pretty large affect on your premium – the higher your deductible, the lower your premium and vice versa, so to keep your monthly payment down while still carrying a decent level of collision insurance you’ll opt for a higher deductible.
Comprehensive insurance will cover any damage sustained to your car that wasn’t directly the result of an accident. Acts of vandalism, attempted theft, damage from fire, acts of God and natural disasters are the types of things that comprehensive insurance will take care of for you.
Uninsured Motorist Coverage
Even though a minimum amount of automobile insurance is a requirement to have your vehicle on the road, that doesn’t necessarily mean that everyone operating a vehicle will have it.
Uninsured motorist coverage is a requirement in most states and will cover the damages to your vehicle as well as bodily injury in the event that you are struck by a motorist driving without insurance.
Personal Injury Protection
Personal injury protection coverage covers the cost of treatments for injuries and funeral costs for you or other passengers in a car, or as pedestrians, involved in an accident. At this time personal injury protection coverage isn’t required in every state, so depending upon your residence it may not be something that you’ll have to worry about.
Those are the basic minimum requirements to drive your automobile legally in any state, and though it may seem like a lot to digest, taking a quick overview of your particular vehicle, the environment you operate it in, the amount of driving you do and your personal driving record should allow you to pick out the best possible plan of coverage for your automobile that will have you on the highway without putting too much of a dent in your wallet.
A. Nutt
http://www.articlesbase.com/finance-articles/learning-the-basics-of-auto-insurance-673625.html
Comments
for anyone who knows a lot about auto insurance?
i’m young and just got my driver’s license. after months of learing about licensing, i thought it was all over. but, no! there is another entire world out there……insurance! i have no idea what insurance or registration or any of that is, i didn’t learn about it because i thought i could by the car and be done with it. i have so many questions about what this "auto insurance" is…….what about the basics?
I agree. Get as much coverage as you can afford. Especially if your car is less than 3 years old. You won’t regret it.
You pay for insurance just in case you get into an accident and damage your car or someone else’s property or cause/receive injuries.
The law requires you to have a minimum amount of insurance to drive, but you can purchase more, like, if you drive a nicer car and want to be sure you’ll be able to afford repairs. Or you can just buy the minimum and hope you don’t need anything costly fixed.
Talk to an insurance agent about what would be right for you. You may be eligible for a student discount. An agent can explain to you how a claim works, should you get into an accident, and tell you just what you will end up paying.
Good luck!
References :
well my daddy owns his own insurance agency and he sels all kinds of insurance. from wat he says to his customers i learned tht if u dont hav auto insurance, ur gonna hav to pay for watevr damages happen to ur car. but thts all i noe. i think tht most of the basics. try callin an insurance agent for help. most agents should be willing to explain everything to u and f theyre not, tht just means they hav extremely bad customer service and u dont wanna get insurance from them
References :
Auto insurance is just like all other kinds of insurance, in that it protects you in case of accident by paying for damages. All states and provinces have a minimum amount of insurance that is required to drive.
This is usually consisits of liability insurance
Liability insurance covers all third parties when you are found at fault for an accident up to a fixed agreed upon amount, for medical expenses and property damage. So basically if you are at fault for a car accident, your liability will cover the damages you cause to the other driver.
It is important to have a high level of liability coverage as any damages over your coverage amoutn will be your responsibility to pay. This could end up being several thousand dollars so make sure you have enough liability.
Other forms of insurance you can get are comprehensive and collision coverage which protect your car and more in depth information on all auto insurance including the state minimum requirements can be found at http://www.auto-insurance-knowledge.com
Hope that helps
References :
http://www.auto-insurance-knowledge.com
It is VERY important to read every document you sign, review every declarations page you receive, and read your policy when you get it.
The declarations page lists 1) who the policyholder is, 2) who the insured drivers are, 3) the vehicles covered, 4) the coverage for each vehicle and 5) endorsements to your policy.
An endorsement, or addendum, is extra coverage. For example, if your auto policy only pays $1000 for stereo equipment but your equipment cost $2000, you want an endorsement for $2000 so you have coverage.
A policy spells out what YOUR rights & responsibility are and what THEIR rights & responsibility are in the event you have a claim. This is dictated under each coverage and can vary from coverage to coverage. This is a legal and binding contract between both parties and in order for coverage to apply all terms of the policy must be met.
There is no such thing as ‘full coverage’ insurance. Each coverage is seperate and must be purchased seperate, and you should buy coverage based upon your particular needs. For example, if you have a clunker that’s paid for may only want to carry liability and uninsured motorist property damage and uninsured motorist coverage(if you get hit by someone w/o insurance and they are at fault). If your car is relatively new you would want to purchase liability coverage, uninsured motorist coverage, collision coverage, comprehensive coverage, rental car coverage, and maybe even towing coverage. If you are making payments on your car to a bank, you may even want to buy GAP coverage.
Keep in mind that the higher your limits are, the less of an exposure you have to out of pocket expenses. Especially when it comes to your bodily injury and property damage limits (aka liability coverage).
You will have to select a deductible for your comprehensive and collision coverage. The lower your deductible, the higher your premium, the higher your deductible the lower your premium. Your deductible is what YOU agree to pay towards your vehicle repairs before the insurance company will pay. The standard deductible is $500. This means you pay the 1st $500 of damage, the insurance pays the rest.
Collision coverage pays for damage due to collision with another vehicle or object. Comprehensive coverage pays for damage caused by anything other than a collision, such as fire, theft, vandalism, shopping cart.
As the registered owner of the vehicle you are ultimately responsible for anything your car does whether you are driving it or your friend is. So don’t let anyone drive your car unless it’s an emergency, like you are too drunk to drive (just be sure they are sober).
References :
Welcome to the abridged version of auto insurance 101:
1) Collision covers your car if/when you crash it.
2) Comprehensive covers your car if it is stolen, burns, hail destroys it, etc.
3) Liability covers the other car and/or people you will crash into.
4) Deductibles are your portion of collision and comprehensive — the higher they are the less your premiums will be. (note: just be ready to fork out a thousand dollars of your own money for every loss)
5) Other coverages are add-ons, like rental (which you won’t be able to do until you turn 21), emergency road service, etc.
6) Remember, you don’t need insurance — until you REALLY NEED insurance, so buy as much coverage as you can afford.
References :
Old claims dude
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