by Shadow Boxer
Online Auto Insurance Basics
If you are a driver in the United States Of America, you are required by law to carry some form of auto insurance. The problem lies with which type of auto insurance to carry and how much will it cost.
Let’s discuss the different auto insurance policies offered in the market today. The first one is liability insurance. Now, there are two types of liability insurance: bodily injury and property damage. Now, we would often see numbers such as 25/30/25 when we go through auto insurance literature.
This means that the auto insurance company will pay up to $25,000 for bodily injury per person, $30,000 per accident, and $25,000 for property damage per accident. So, if this is what you have in your policy, we can see that the amount of coverage is a little low. You need to assess your situation and lifestyle and decide what is best for you. As mentioned before, almost all US states require its motorists to carry liability insurance. New Hampshire and Wisconsin are not part of this group.
The next form of insurance is \”collision\”. Collision coverage would cover not only your vehicle and any personal property that you have damaged but also damage to the other vehicles involved in the accident.
If your car gets vandalized, flooded or catches fire, comprehensive insurance will cover you. Comprehensive insurance kicks in when the damage to your car is not caused by collision.
There are drivers who are currently driving around without car insurance coverage. If you get in an accident with one of these drivers, your uninsured/underinsured motorist insurance coverage will cover you and your vehicle. Uninsured/underinsured policy takes care of you when the other driver does not have insurance or has insufficient insurance to compensate you for damages.
Then there’s PIP or personal injury protection. PIP covers medical bills and other expenses, such as wage loss and funeral expenses, caused by the accident. This will cover you whether or not the accident is your fault or not. PIP is now required in 16 states.
Now, we get to “no-fault” auto insurance. Its name has confused a lot of motorists over the years. Under this system, the auto insurance company will pay for the damages you incur because of the accident. In a no fault insurance system, each driver in an accident pays for his or her own damages. There is no need to find who is at fault under this insurance program. Because of this program’s nature, people thought that this would minimize the number of lawsuits caused by road accidents. This was not the case as statistics showed that accident rates and costs went higher, so did insurance premiums.
Because of this, no-fault laws have been repealed in some states that had originally enacted the program. These states were Nevada, Pennsylvania, New Jersey, Georgia, Connecticut, Colorado, Florida and Washington DC. The other states that had the “no-fault” law allow them still. NJ and PA now allow drivers to choose between a no-fault policy and a standard insurance policy. No one is sure if this situation is more effective than the standard methods.
Getting Cheaper Premiums
For us average consumer, premiums rates can be hard to decipher. Somehow, it defies reason. Auto insurance companies seem to have a weird way of computing your insurance premium and increasing them. If you were in a car accident, your insurance premium will increase even if you were not the one at fault. It does not matter to them where you caused the accident. The accident goes against you just because you got yourself in the position to be a part of an accident.
It’s an uphill climb, so it seems. We need to work hard and come with factors that can lead our auto insurance companies to give us discounts or, at least, reasonable premiums. There several factors to consider if we are going to affect the way our insurance companies come up with our insurance premiums. The first factor they consider is age. Females get lower rates than male.
If you’re a male driver and you’re 25 years old or younger, you might want to ride a bike! Not much can be done to lower your rates, you are in a very high category, sorry! They’ll check your vehicle location, where you park your vehicle at night. Drivers in urban states get higher rates than the ones living in rural areas. For example NC and CA drivers pay out higher annual insurance premiums. If you’ve filed a claim or multiple claims in the past five years, this will greatly increase your annual premiums. If you have been ticketed for speeding or other moving traffic violations, your rates will increase as well.
Your car plays a role in factoring annual premiums too. Vehicles that are expensive to repair, luxury cars, and high performance vehicles usually pay higher premiums. There are a handful of cars that are prone to auto theft like the Toyota Camry and Honda Accord. If your car is on the list, you will pay higher premiums. Off road vehicles, modified vehicles and large SUVs will also cause your premium to rise above other vehicles.