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| Little green lizards, good hands, and people we can count on. How are we supposed to know which auto insurance company is the best fit for our needs? It can be both confusing and frustrating when shopping for insurance. However, if you take the time to formulate an outline of what you know you need and what questions you want to ask, shopping can be a lot easier. Auto insurance is not an optional purchase. United States’ law dictates that every automobile on the road must be insured. The law also has preset amounts pertaining to the limits of coverage we must carry. These dollar amounts vary between states, and any insurance agent will be able to discuss your state’s minimums and the types of coverage required. Every state, with the exception of New Hampshire and Wisconsin, mandate that every driver carry liability insurance. This type of coverage pays out only to the owner of the auto you hit if you are in an accident. It does not cover your car’s damage. The next most common types of coverage are collision and comprehensive. The former covers damage to your car no matter what you collide with. The latter takes care of all other incidents such as theft or falling objects. Most lending institutions require mandatory comp and collision coverage to be in effect on any auto they finance. This means that you can’t drive off the auto lot without proof of coverage. Many motorists opt to drop this coverage once their auto is paid for. Regrettably, there are drivers on the road who don’t have insurance coverage. It is estimated that with today’s unemployment rate and failing economy, uninsured motorist figures will rise to 16.3% this year. What happens if you get into an accident with an uninsured or underinsured motorist? Unless you personally carry Uninsured Motorist Insurance (UMI), you are out of luck. UMI also pays for hit-and-run accidents. One consolation to purchasing this coverage is that it tends to be the least expensive of all the types. Today, most insurance companies offer several types of discounts to customers, so don’t be afraid to ask about them. A lot of companies offer multi-car discounts, for example. Other companies offer discounts to customers who insure their homes along with their autos. You can also combine coverage with recreational vehicles, motorcycles, boats, and renter’s insurance to become eligible for discounts. The rates your agent quotes you will be based on several different factors (It is suggested to obtain quotes regularly). The make and model of your vehicle are perhaps the most important determinants. Of course, more expensive cars cost more to insure. However, most people are probably unaware that SUV’s are a type of vehicle that will cause your rates to be higher. Two components regarding SUV’s that don’t apply to cars are their size and the relative damage that can be caused by them. Also, SUV’s don’t handle as well as most autos; therefore, they have a higher rollover rate. When determining rates, insurance companies take under consideration the area you live in and the amount of crime there. More affluent areas are not necessarily safer and less expensive. The more expensive the autos in the neighborhood are directly correlates to increased auto thefts, thus raising insurance rates. Emergency response times are also factored into the rate quote equation. If you live close to a police or fire station, your rates will be lower than those who live in rural areas. The dreaded teenaged driver is perhaps the most expensive individual to insure. This is due to their inexperience with driving. Couple this with the facts that many teen drivers have demonstrated an inability to pay attention and text/talk on the phone while driving, and you have some of the highest rates around. Most companies offer discounts to teen drivers if they maintain a certain grade point average in school and if they complete a driving course prior to obtaining their license. These discounts can be sizeable. Your driving record also affects your insurance rates. Whenever you request a quote from an agent, they will ask if you have had any recent violations. They will also ask for your driver’s license number so they can run a DMV search on you. Moving and non-moving violations both matter when it comes to prices, and infractions involving alcohol will make your rates skyrocket. Being convicted of a DUI puts you into a high-risk category and stays on your driving record for up to seven years in most states. Your rates will not drop until the infraction is expunged from your record. There are many myths, misconceptions, and urban legends associated with car insurance rates. Be assured that owning a red vehicle does not affect your rates in any way. No color does. Another myth is that if personal items are stolen out of your car they are covered. In most cases they are not covered, but if they are attached to the auto they might be. An example would be if your cell phone was charging on a device that was connected to your auto while it was stolen. If it was in your purse and the entire bag was stolen, it wouldn’t be covered. However, being attached to the vehicle leads to the next misconception: Auto insurance covers upgrades and custom after-market parts. Unless you have a rider on your policy that specifically states as such, you aren’t covered. If your tire rims cost $1,000 each and you do not have any conditions written into your policy, you will only be reimbursed at fair market value if they are stolen. It is best to discuss any modifications or changes you make to your vehicle with your agent. Also keep your receipts and take pictures as proof. Taking a leisurely Sunday drive isn’t as carefree and inexpensive as it used to be “back in the day.” Driving conditions that are truly beyond our control put us at risk every time we slide behind the steering wheel. Stay safe, and have auto coverage. Sources for this story included: www.associatedcontent.com, www.edmunds.com, and www.4carinsurancequotes.com. |
Choosing Auto Insurance |
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