What is Auto Insurance?
November 21st, 2009
Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides property, liability and medical coverage:
* Property coverage pays for damage to or theft of your car.
* Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
* Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
How is your auto insurance policy price determined?
The average auto insurance policy price is derived from a variety of factors.
Many of these variables are common knowledge and make sense for the most part.
it’s always a good idea to refresh yourself with what insurance companies are looking for when determining how much your coverage will cost.
*Driving Record
*Coverage Amount
*Age
*Vehicle Model and Driving Mileage
*Your Residence
What auto insurance coverage?
What types of auto insurance coverage to choose from?
*Liability: coverage is the primary – and usually mandatory – part of the auto insurance equation. Liability means what the word implies: it saves your bank balance when you're liable for destroying someone else's car or body parts.
*collision: which is not to be confused with liability. Liability pays the bills for damage you cause to the other party; collision covers damage done to your own car. If someone else totals it, his liability pays for repairs (assuming he doesn't hit and run), so if you can follow the aforementioned tip of not crashing, you generally shouldn't need collision. In simplified terms, buying collision insurance can be thought of paying someone to save you from yourself. The safer you drive, the less necessary it becomes.
*Uninsured/underinsured motorist coverage, required by most states, is always a good idea knowing that 17% of drivers out there don't have any insurance, and a lot of the rest probably skimp by on the sometimes-inadequate state minimums. This usually varies in tandem with the body injury part of liability. Don't sweat it too much, as the premium is a mere fraction of liability.
*Personal Injury Protection (PIP) or Medical Payments (MedPay) provides reimbursement for medical bills of you and your passengers regardless of who's at fault, and for resulting lost wages. This is an option – one that those with good health insurance plans might not want to exercise.
*Rental reimbursement simply pays for the cost of renting a car. Even if it costs $30 a year, why bother? $30 basically buys a one-day car rental, so it's hardly worth it unless you get stranded a lot. (In which case, you might want to switch cars.) If you own a second car, this is completely unnecessary. The same reasoning applies to towing insurance and the like.
*GAP insurance, which covers the difference between what the car is actually worth and what you owe. This might be an attractive proposition for a car that with heavy depreciation, which is a symptom suffered by young cars in general. A $20,000 car might drop to $12,000 in market value after a year. If you total the car at that point, $12,000 is all you'll get from your insurance company, yet you're still obligated to the $16,000 in payments that still remains. Obviously, $4,000 is one gap you'll want closed.
Can you raise or lower your auto insurance rate?
There are 10 factors that can raise or lower auto insurance rates
*Your Age
Generally younger drivers are considered to be high risk and so the insurance rates are higher.
*The make of your car
Most insurance companies tabulate auto insurance rates based on the make of the vehicle. Compact cars and sedans have lower rates while sports models, exotic cars, and SUVs are assigned high rates of premium.
*Gender is a factor too
Females get lower rates of auto insurance while males pay higher auto insurance premiums.
*Financial stability
Auto owners with great credit scores and credit reports generally pay lower premiums than those with bad credit scores and reports.
*Driving records have a say in premiums payable
If a driver has a clean driving record for three consecutive years then auto insurance providers will happily extend policies with lower premiums.
*Where you stay
Those who live in the city pay more than individuals who live in the country or suburbs. Areas with lower crime rates and less congestion attract lower auto insurance premium rates.
*How many insurance policies you hold
If you approach for auto insurance the same insurance company that has you covered for life, health, hone and so on then you would automatically be eligible for great discounts on premiums payable for an auto insurance policy.
*The condition of the car will be considered before offering a policy
The make, how old the vehicle is, its maintenance, and so on. A car in prime condition will get better premium rates than a rattletrap.
*The distance traveled per year
If you restrict the number of miles traveled then you will be able to get auto insurance at lower rates. To do this you need to walk, use public transport, and car pool.
*Whether or not you are eco-friendly
If you care for the environment and drive a non polluting vehicle then the auto insurance premiums will be lower.
Why do you need international vehicle insurance?
If you live in a foreign country for an extended period it is important to ensure that your vehicle is properly insured at all times. International vehicle insurance is specially designed to meet the needs of:
* Diplomats.
* Expatriates.
* Humanitarian organizations.
* International businesses.
* International charities.
* International schools.
* Religious orders.
* United Nations agencies.
International Vehicle Insurance should include cover for:
* Accidental damage, fire and theft risks.
* Protection against windscreen breakage and for fitted accessories such as audio equipment.
* Additional protection against riot, civil commotion, hijacking and armed robbery.
* Hurricanes, earthquakes and flooding.
* Payment of the purchase price for a seriously damaged or stolen car that is less than 12 months old (on Non-commercial Policies only).
* Immediate cover anywhere in the world (except the USA and Canada).
* Multiple vehicle and fleet discounts.
Can your age be a problem in auto insurance?
In auto insurance know as the age factor.
Your age can be a big problem in auto insurance. It could also be a great advantage. Whichever group you fall into, there's a way for you to make the most remarkable savings in your auto insurance premium.
*If you're above fifty-five thank your stars. You've entered the hallowed zone in auto insurance. If you don't get pampered by an auto insurance provider now, you never will. This is because you belong to an age group that has a high reputation of road safety.
*If you're under-25, you're considered a very high risk as far as auto insurance is concerned. Yes, if you're in your early twenties you'll be better off than a teenager. However, you still are a high risk group.There are several options open to you.
-You can get married if you are old enough and it makes sense in your circumstance. I'm not Kidding here. Marriage does reduce the perception of risk auto insurance providers have of you.
-Another thing you can do as an under-25 is to be on your parent's auto insurance policy.
Why is Women's auto Insurance So Much Cheaper Than Men's?
Statistically, women drivers are the safest on roads, and therefore are rewarded with cheaper premiums for car insurance. Women on Wheels combines these discounts with supreme cover, that automatically includes a free replacement car (on comprehensive), free abroad travel, and free legal cover!
Adel Khamis
http://www.articlesbase.com/insurance-articles/what-is-auto-insurance-677147.html
November 21st, 2009 at 2:06 pm
Is the auto-insurance claim information shared if I switch the insurance company?
Hi!
I am with auto-insurance company X right now and due to few number of insurance claims that I had made, my insurance is going up. I am wondering if I try to switch to some company Y, will X share my claims information with Y?
Thanks!
November 21st, 2009 at 7:08 pm
Your driving record (including accidents, tickets and filed claims) is public knowledge and is kept on a database through your state. Most states use the same database so that your driving record is basically public knowledge.
While Insurance company Y doesn’t get information directly from Insurance company X, all they have to do is look up on the database to find all of your tickets, claims and accidents.
Basically, you shouldn’t lie on your application because you won’t get away with it.
References :
November 21st, 2009 at 7:10 pm
Of course! One of the questions in the applicationt that must be answered truthfully is similar wording to "please list all accidents you have been involved in as a driver, whether at fault or not, in the last #x years". They also ask for the approximate amount of any claim associated with the accidents. Some companies want 3 years, some 5, and they do check. If they issue a policy immediately based on falsed information, you would receive a registered letter within days, possibly cancelling it, or increasing premiums substantially. In my office, sometimes I would fax an application and receive a phonce call back within half an hour asking why a certain accident hadn’t been declared by the applicant.
References :
November 21st, 2009 at 7:12 pm
Most of the time, yes they will find those prior claims.
Many insurance companies participate in a national database that tracks claims. They will also check you MVR records of any tickets or accidents. It is very difficult to slip one past an insurance company.
Fraudulently stating fewer claims than you actually have is not a good idea. If you filed another claim and the prior ones were discovered, they could deny the new claim, back charge you a higher rate, and/or cancel the policy on the spot.
Because your rate went up due to the claims, it’s not a bad idea to shop around, just make sure they are rating you with knowledge of those prior claims.
References :
Insurance Agent
November 21st, 2009 at 7:14 pm
yes they will find it. when you get a quote they may not run your reports so its up to you to be honest about any points or accidents on your record. if you dont tell them they WILL run your records when the policy is issued and then your premium will be higher than the quote and they have the right to cancel the policy with notice. its probably better for you to wait until your record is clean again before you switch
References :
Agent
November 21st, 2009 at 7:16 pm
Yes. Most insurance companies subscribe to a service called "CLUE". It’s basically a data bank where companies share claim information with each other.
Most companies will order a "CLUE" report before issuing your policy and find out that you have had previous claims. It is always a good practice to go ahead disclose this information up front, if not the rate that you are quoted will not be accurate.
I would suggest getting as many quotes as possible!
Because rates vary hundreds of dollars with companies you might be surprised to find out that by comparison shopping your maybe able to get insurance through another company without seeing a huge increase.
As mentioned already the key is to getting as many quotes as possible. The easiest way to do this is by using free on line insurance rating services. I read a statistic that people who use these services usually save an average of 30%-40%. If that holds true for you then it basically you would most likely be able to keep your rates close to what you are currently paying.
There is a consumer site that I came across at: http://www.InsuranceEasy.org that has links to free quoting services that are reliable. By using each of the links listed on their auto insurance page you will end up with the 5 or 6 best quotes from hundreds of companies.
Hope this helps!
References :
November 21st, 2009 at 7:18 pm
THE ANSWER IS YES!!!!! 99% of all insurance carriers report to a service similar to a credit bureau. Then all the other companies can pull your DRIVING RECORD which is what the DMV has on record for you and a CLUE REPORT which is a record of claims and accidents (shows everything from major accidents down to towing and rental claims). I hope this helps.
References :
I have sold auto insurance for 15 years and I am licensed in 35 states.