Books & Music
Food & Wine
Health & Fitness
Hobbies & Crafts
Home & Garden
News & Politics
Religion & Spirituality
Travel & Culture
TV & Movies
10 Things to Know About Buying Auto Insurance
1. How is Your Insurance Rate Determined?
Two factors determine what you pay for auto insurance. The first factor is underwriting and the second factor is rating. Insurance companies underwrite to assess the risk associated with an applicant, group the applicant with other similar risks and decide if the company will accept the application. Based on the results of the underwriting process, the rating assigns a price based on what the insurer believes it will cost to assume the financial responsibility for the applicant's potential claim.
2. Several Factors will Affect Risk Rating
Your driving record, area in which you live, gender and age, marital status, prior insurance coverage, vehicle use and make/model of your vehicle are common factors that can affect the price you pay for your auto insurance.
3. Ask Your Agent About Discounts
Discounts are awarded because the insurance company sees you as a "better risk". Here are some discounts you should look for: multiple vehicles, driver education courses, good student, safety devices, anti-theft devices, low mileage, good driver/renewal, auto/home package and dividends. Not all states offer all discounts, so check with your agent to see if you qualify.
4. Tort System vs. No-Fault System
Each state must implement either a tort system or a no-fault system. The system your state has implemented will determine what kind of insurance is available to you. The three (3) basic coverages sold under the tort system are bodily injury liability insurance, property damage liability insurance and uninsured motorists coverage. In a no-fault state, coverages will vary, but a no-fault system your insurance company pays you directly for your losses as a result of injuries sustained in an accident, regardless of who is at fault. Check with your state insurance department for questions concerning tort or no-fault state systems.
5. Check Into Optional Coverage
The most commonly recognized coverages, in addition to the basic liability package, are collision and comprehensive coverages. Collision coverage pays for physical damage to your car as a result of your auto colliding wit an object such as a tree or another car. This is relatively expensive coverage and is not required by law. Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. This coverage will also cover broken glass and windshield damage. Comprehensive coverage is less expensive than collision, but is also optional. Other optional coverage includes medical payments coverage, rental reimbursement coverage and towing and labor coverage.
6. Where to Go for More Insurance
Information is available to consumers from a number of unbiased sources. These sources include public libraries, state insurance departments, online resources, consumer groups and consumer publications. Every state insurance department has personnel available to answer questions regarding auto insurance coverage and many departments publish premium comparisons to make shopping around easier.
7. Shop Around Before You Buy
When shopping for auto insurance, premium quotations are a useful tool for comparison of different companies' products. When asking for price quotations, it is crucial that you provide the same information to each agent or company. The agent will usually request the following information: description of your vehicle, its use, your driver's license number, the number of drivers in your household, the coverages and limits you want.
8. Where to Shop
Ask your neighbors, relatives and friends for recommndations on insurance companies and agents. In particular, ask them what kind of claim service they have received from companies they recommend. Remember to shop around to get the best price and service.
9. For Your Protection
Once you have selected the insurance coverages you need and an insurance agent or company, there are steps you can take to make certain you get your money's worth. Before signing an application for any insurance coverage, call your state insurance department and verify that the company and the agent are licensed to do business in your state. It is illegal for unlicensed insurers to sell insurance, and if you buy from an unlicensed insurer, you have no guarantees that the coverage you pay for will ever be honored.
10. Read Your Policy Carefully
You should be aware that an auto insurance policy is a legal contract. It is written so your rights an responsibilities, as well as those of the insurance company, are clearly stated. When you purchase auto insurance, you will receive a policy. You should read that policy and make certain you understand its contents. If you have questions about your insurance policy, contact your insurance agent for clarification. If you still have questions, turn to your state insurance department.
| Related Articles | Editor's Picks Articles | Top Ten Articles | Previous Features | Site Map
Content copyright © 2015 by Denise M. Castille. All rights reserved.
This content was written by Denise M. Castille. If you wish to use this content in any manner, you need written permission. Contact Denise M. Castille for details.
Website copyright © 2016 Minerva WebWorks LLC. All rights reserved.