Thursday December 15th, 2011 13:34 Evaluating How Much Auto Insurance You Need

One of the easiest ways to save money on auto insurance is to drop coverage.  The less coverage you carry on your policy, the cheaper the premiums will be.  Before you start making changes to your insurance, however, you should take the time to assess how much coverage you need.  Having too much insurance can be a waste of money spent on premiums, but having too little insurance can leave you in financial trouble if you get into an accident.

There are several types of coverage on your policy, and you should learn what each does before deciding whether you need it:

·         Liability coverage:  Bodily injury liability and property damage liability are both required by the state.  The minimums differ from place to place, so you should check what the legal minimum is before you try to adjust your coverage.  Liability coverage pays for damage or injuries that you cause to someone when you are in an accident with them.  If you don’t carry enough coverage, you could be sued or sent to collections for damage in excess of your limits.

·         First party coverage:  Collision and comprehensive are first-party damage coverage.  Collision covers damage to your vehicle caused by an impact with another vehicle or other property.  Comprehensive coverage pays for damage caused by weather, vandalism, theft, or other non-accident related damage.  You pay a deductible for this coverage, meaning you are responsible for a portion of your damage before your insurance will pay.  The higher your deductible, the lower your coverage.

·         Personal Injury Protection/Medpay: Some states have different requirements for medical coverage than others.  Medical coverage helps to pay for your medical expenses in the event of a claim, including doctor’s visits and lost wages.  Your health insurance will also cover a portion of these costs, but health insurers often refuse to pay for accident-related care if any other coverage exists on another policy.  Review your state requirements and discuss your options with your medical insurance provider before deciding to remove this coverage.

·         Uninsured/Under-insured Coverage: Some states provide coverage for damage to your vehicle caused by a person with no insurance, even if you don’t have collision coverage.  Underinsured motorist coverage pays for the difference between the at-fault person’s liability limit and the actual cost of your damage.  Uninsured motorist coverage is not available in all states.

If you are making payments on your vehicle, you will need to carry full coverage.  If you own it outright, however, you can drop your policy to liability-only.

One thing to keep in mind when selecting coverage for your vehicle is the worth of the vehicle.  If your car is old, its value has probably depreciated significantly.  In the event of an accident, an old vehicle may be deemed a total loss whether or not the vehicle is still repairable or even drivable.  Look at the Blue Book value of your vehicle or another valuation source.  If the car is worth only a few thousand dollars, you will pay more in premiums than the worth of the vehicle every year that you carry full coverage.

In: General, Tips and TricksNo Comments

Tuesday November 15th, 2011 12:49 Car Insurance Tips for Geeks

Geeky girl

Auto insurance is something you must understand before you can effectively cover your insurance needs. Most people can satisfy their needs with a basic full coverage auto insurance policy that has liability, collision, and comprehensive coverage. Car rental, emergency road service and uninsured motorist are worth considering depending on individual circumstances.

  1. Liability Insurance covers the other vehicle and passengers if you have an at fault accident.
  2. Collision covers your vehicle and passengers if you have an at fault accident.
  3. Comprehensive covers your vehicle against most other types of incidents including damage caused by hit and run, weather related damage and theft.
  4. Car rental pays for you a rental car while yours is out of commission because of a claimable accident.
  5. Emergency road service pays for car repairs made on the roadside or for tow charges to the nearest garage or dealer.
  6. Uninsured motorist covers your vehicle and passenger if an uninsured driver causes an accident.

In most cases, the law requires liability insurance coverage and if a financial institution has an outstanding loan on the vehicle, they usually require full coverage. Insurance companies collect statistical data on a daily basis. These statistics are contributing factors to the premium you will pay. This information consists of data that tells the insurance company what areas of the country have the most claims and those that have the largest number of serious accidents.

Geek woman

Data shows the age group and sex that have a higher number of accidents and the areas with the highest number of weather related claims as well as much more collected data. You have no control over these premium-setting circumstances. There are circumstances directly related to the amount of premium you pay that you do have some control over. The following tips will help you get the best discounted insurance rates possible.

  1. Multi-vehicle discount- Insuring all your vehicles with the same company will discount the premium.
  2. Multi-insurance discount- Purchasing all your insurance needs from the same company nets a discount.
  3. Deductibles- The higher the deductibles are the cheaper auto insurance rates will be.
  4. Driving record- The best discount given is for a good driving record with no tickets or chargeable claims.
  5. Vehicle type- Some vehicles are more costly to insure than others because of theft, involvement in accidents, safety features and other factors.
  6. Credit history- Good credit indicates a responsible driver and results in better rates.
  7. Miles driven- The more miles you drive the higher insurance rates will be.
  8. Driver training- Any safety drivers course will result in a discount.
  9. Memberships- Ask about membership in organizations because many will provide a discount for you.

When you understand auto insurance terms and what they mean it is easier to calculate your needs. You can buy insurance direct, through an agent or a broker. Direct is cheaper, but you eliminate the expert that can help with questions and claims at any time. Most people find that having an agent or broker at their disposal is worth the cost. Go online to an insurance comparison site and find companies that fit your needs at an affordable price. Research any company you are interested in doing business with to make sure they are solvent and pay claims fairly and quickly.

In: General, Tips and TricksNo Comments