The Fundamentals Of Auto Insurance
It is required to have some form of auto insurance in most states throughout the U.S. However some states do not require this. Instead some states will charge an annual fee that must be paid to the state for each vehicle owned.
If you choose to not have auto insurance then there can be some consequences. Third party insurance is most commonly the lowest form of insurance that a state requires, but if you don’t have that there can be penalties. Penalties of not having auto insurance include license or registration suspension and even revocation, a fine, and possibly even jail time.
There are several different coverage plans to choose from when you get your vehicle insured. Liability is the lowest form of coverage. Liability is available through a split limit policy or a combined single limit policy. A combined single limit policy combines both bodily injury and property damage into one single payment. A split limit policy splits the two into different payments. Collision coverage is another one of the many types of coverage’s. Collision coverage provides payments for a vehicle that needs to be repaired due to collision damage. If the vehicle is unable to be repaired then the collision coverage will provide payment of the cash value.
Comprehensive coverage provides coverage for the insured’s vehicle that receives damage by something other than a collision. This would include theft, fire, weather, vandalism, or impact with animals. Another form of coverage is loss of use coverage. Loss of use coverage is also known as rental coverage. This coverage provides reimbursement on rental expenses associated with having an insured vehicle repaired due to a covered loss.
In past years auto insurers would only pay for the cost of towing a vehicle if it was related to an accident covered under the vehicles insurance policy. Now there is car towing coverage or roadside assistance coverage. Roadside assistance coverage pays for tows that are non-accident related.
Due to the statistic that male drivers have a higher involvement in accidents their rates are normally higher than that of a female driver’s. Age is a factor that can determine the rate of car insurance also. Teenage drivers tend to have higher insurance premiums but if they have a good academic record then their insurer may give them a discount. Around the age of 25 it is common that your insurance premiums will start to decrease also.
A fixed contribution that you have to pay whenever you car is repaired under your car’s insurance policy is known as an excess payment. There is compulsory excess and voluntary excess. The minimum excess payment that your insurer will accept for your policy is the compulsory excess. You can pay an extra amount in the event of a claim on your policy, this is known as a voluntary excess. If you pay a bigger excess then it is possible to get a lower premium from your insurer.
In conclusion it is a smart idea to at least insure your vehicle with liability coverage. Don’t forget there are many other different types of coverage to choose from. Some may suit you better than liability. If you don’t choose to insure you vehicle remember that there can be consequences to pay. Just choose what you feel is best for you.
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