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Don’t
base your decision on price alone. Base your decision on value
– what you get for what you pay. Consider the quality of the
company’s claims service and consumer education.
- Purchase
the amount of liability coverage which makes sense for you.
- You
should decide which optional coverage's you want. For example,
do you want optional physical damage coverage's or is the
market value of your car too low to warrant purchasing them.
- Once
you have decided what you want in your automobile insurance
policy, you can now decide who you would like to purchase the
insurance from. For example, you may decide you like the idea
of purchasing insurance from a mutual company rather than a
stock company.
What
are some practical things I can do to lower my automobile
insurance rates?
There are
a number of things you can do to lower the cost of your automobile
insurance. The easiest thing to do is shop around.
It is not
surprising to find quotes on automobile insurance that can vary by
hundreds of dollars for the same coverage on the same car. When
you shop, be careful to make sure each insurer is offering the
same coverage. Many insurers use the ISO policy forms, but this is
not always the case.
Another
way to lower the cost of your automobile insurance is to look for
any discounts that you may qualify for. For example, many insurers
will offer you a discount if you insure multiple cars under the
same policy, or if you have had a driver education class in the
last five years. Be sure to ask your agent or your company about
their discount plans.
Another
easy way to lower the cost of your automobile insurance is to
increase the deductible. Simply raising your deductible from $250
to $500 can lower your premium sometimes by as much as five or ten
percent. However, you should be careful to make sure that you have
the financial resources necessary to handle the larger deductible.
I
have an older car whose current market value is very low - do I
really need to purchase automobile insurance?
Most
states have enacted compulsory insurance laws that require drivers
to have at least some automobile liability insurance. These laws
were enacted to ensure that victims of automobile accidents
receive compensation when their losses are caused by the actions
of another individual who was negligent.
Except for
the minimum liability coverage's that you may be required to
purchase, many people with older cars decide not to purchase any
of the physical damage coverage's. It is often the case that the
cost of repairing the damages to an older car is greater than its
value. In these cases, your insurer will usually just
"total" the car and give you a check for the car's
market value less the deductible.
Suppose
I lend my car to a friend, is he/she covered under my automobile
insurance policy?
Whenever
you knowingly loan your car to a friend or an associate, he or she
will be covered under your automobile insurance policy. In fact,
even if you do not give explicit permission each time a person
borrows your car, they are still covered under your automobile
insurance policy as long they had a reasonable belief that you
would have given them permission to drive the car.
What
is the difference between collision physical damage coverage and
comprehensive physical damage coverage?
Collision
is defined as losses you incur when your automobile collides with
another car or object. For example, if you hit a car in a parking
lot, the damages to your car will be paid under your collision
coverage.
Comprehensive
provides coverage for most other direct physical damage losses you
could incur. For example, damage to your car from a hailstorm will
be covered under your comprehensive coverage.
It is
important to know the differences between the collision and
comprehensive coverage's for a couple of reasons.
- In
order to make an informed purchasing decision about these
optional coverage's, you need to know the difference between
them.
- The
deductibles under the collision and comprehensive coverage's
are often different in amount.
What
factors can affect the cost of my automobile insurance?
A number
of factors can affect the cost of your automobile insurance - some
of which you can control and some which are beyond your control.
The type
of car you drive, the purpose the car serves, your driving record,
and where you live can all affect how much your automobile
insurance will cost you.
Even your
marital status can affect your cost of insurance. Statistics show
that married people tend to have fewer and less costly accidents
than do single people.
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