Car Insurance — Explaining It
When you buy car insurance, you enter into a contract with the insurance company. Under the contract, the insurance company agrees to pay your losses if your car meets with an accident. In exchange, you agree to pay the premium. Property, liability and medical coverage are all covered by car insurance. Damages or theft to your car are paid by property coverage. The liability coverage will pay for your legal responsibility for bodily injury or property damage caused by your car. The medical coverage will pay for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. The validity of most car insurance policies is six months to one year. The policy must be renewed on expiration. All states require you to have some form of car insurance if you own or operate a car. The penalty for driving a car without insurance is different in different states. In some states, your car will be impounded. Some states impose heavy fines. Serious trouble. That’s what’s in store for you if your car is involved in an accident with insurance. You may have to comply with the financial responsibility laws including having to pay for any injuries or damages out of your own pocket. The insurance company will consider your credit history, the age and type of your car before offering you a rate. It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. It is illegal for cars to be operated without insurance. Finally, a few savings tips… 1. Getting married will bring down your rate by a huge margin. It’s commonsense that every person becomes more stable and less reckless once they get married. This stability affects such a person for good when he/she is behind wheels. Furthermore, as a group, their claims are usually less both in number and average cost per claim. 2. “Pimping your ride” does NOT help if you want lower rates. Doing such reduces your car’s safety and, therefore, warrants higher rates as far as the insurer is concerned. Any changes to your vehicle takes your rates up. 3. Do you know that some folks are paying much more in auto insurance because of where their homes are? Homes in the same neighborhood may fall under different risk zones as far as your insurer is concerned. So check with your agent before you commit to a new home. I know: That isn’t usually an issue when you’re looking for a home but it’s really important. But think about it: If your new zip code adds up to $300 to your annual auto insurance rate, how much would that amount to at the end of your 30-year mortgage? 4. Never leave your car unlocked and running while you dash in to get something. This is an open invitation to any thief sniffing around. Car thieves are known to go for easy targets. And what could be easier than a car that’s ready to be driven away — It takes just seconds. 5. An alternative for you is to use your parents’ auto insurance policy. If you are of driving age, then your parents certainly are far above 25 years which means they’re lower risk drivers. You have to bear in mind, though, that the car must be registered in their name and you must be living with them if you want to take advantage of this option. If you do not like the idea of handing the car’s ownership to them and other stuff that may be attached to that, then you will have to forget this option. Learn more here: Discount Auto Insurance and Cheap California Auto Insurance. Chimezirim Odimba is an insurance expert. |