Auto Insurance Guide
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Auto insurance is insurance purchased for cars, trucks, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.
There are two main types of auto insurance. They are:
Full Coverage Auto Insurance
Auto insurance is insurance purchased for cars, trucks, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.
There are two main types of auto insurance. They are:
Full Coverage Auto Insurance
In the event of an accident, full coverage auto insurance will protect the car and any other cars or property damaged. Normally, finance companies stipulate that any of their clients that have car loans must insure their cars fully. This protects the bank, as the car is theirs until the loan is paid off by the owner.
Third Party Auto Insurance
Third party or liability auto insurance will only protect another party in the event of an accident. So if a car with third party auto insurance hits another car, the other car’s damages, and perhaps even the expenses incurred from loss of use, would be paid by the offender’s third party insurance. However, any damage to his/her own car would have to be borne by the car owner. Naturally, this is less expensive than full coverage, as it carries far less risk.
Table of Contents
Auto Insurance Coverage
There are six main types of coverage that can be included in a car insurance policy. They are:
Comprehensive Coverage
Comprehensive coverage, as the name implies, means that no matter what happens to your car, you are covered. This includes theft, fire, and damage caused by extreme weather such as storms, floods, snow or even lightening. If you face the elements daily – or live in a dangerous neighbourhood – then this type of coverage is for you.
Drivers Uninsured or Drivers Underinsured
This type of coverage will protect you and your passengers in the case of an accident caused by another driver, regardless of their insurance status. Without this coverage, you may still end up paying the costs of repair even if the accident was not your fault, simply because the other driver didn’t have any insurance, or their policy did not cover third party damages. With this coverage, you needn’t worry.
Personal Injury Protection (PIP) Medical Coverage
A lot of drivers focus on insurance for their vehicles, forgetting that serious accidents can send drivers and passengers to hospital, leading to medical bills and loss of income. PIP policies will cover these costs, and can even extend to funeral costs.
Property Damage
And it doesn’t stop with cars and passengers. Third party property can be damaged, for instance parked vehicles, buildings and gardens. This type of coverage can be used to offset costs accrued with damage to property
Bodily Injury Liability
This coverage will cover the medical bills for injuries incurred by other drivers, passengers or bystanders in the case of an accident. Don’t forget that healthcare costs are the largest source of in the US – and don’t add to that statistic by ensuring you are covered!
Collision
This is for the cost of collision (that’s a crash to you and me) with another car, lampost, shop window or any other object. This coverage normally comes with a deductible starting from $250. The higher the deductible, the lower the premium will be, understandibly. This coverage is for physical objects only – it does not cover medical or legal bills.
Collision coverage under your auto insurance policy generally includes reimbursements for structural damage, functional damage and paint and body work associated with accidents. In some cases, the cost of fixing the car plus its salvage value will exceed the car’s working condition. For the “totaled” car, the insurance reimburses you based on the car’s fair market value.
[break]Auto Insurance Specialists
When you are preparing to purchase an auto insurance policy you will at some point in the process work with an auto insurance specialist. A specialist in this capacity can help you to find the absolute best insurance policy possible. First he will help you to determine what you need in an . Your driving habits will be taken into consideration as will your lifestyle needs. This is necessary for a specialist to find a plan that the customer can afford and one that is suitable to their needs.
are there to make sure that you get what you want. As the customer it is your job to provide as much information to the specialist as possible and from there he can find you the absolute best deal he can on vehicle insurance. As a specialist he is privy to information that you do not have access to on your own. That makes him an expert at what he does which is what you require.
The auto specialist will take the information you have provided to him and use that to find out what policies are out there and which ones are most suitable to your needs. He will then negotiate on your behalf to find you the best deal possible. With a specialist working for you you do not need to worry that you will sign up for a vehicle policy that is too expensive or will not suit your needs. Insurance specialists have the inside track on the industry and know exactly what to look for.
The number one goal of an insurance specialist is to find his or her customers the best deal possible on auto insurance. This person needs to be able to effectively communicate with you about your coverage and what you are looking for in a policy. He or she should also be the first one to let you know if changes need to be made with your insurance policy. If you have any questions then do not hesitate to ask the specialist. That is what he or she is there for – to do the best job possible to find you an that will suit you in every way possible.
[break]GAP Insurance
GAP insurance stands for Guaranteed Auto Protection insurance but as its name suggests, it also represents the ‘gap’ between the insurance value of a car and its actual market value. In case of an accident or damage caused to a newly bought car due to fire, flood, hurricane, tornado, theft or vandalism, cash cover might be required. The market value of a car starts depreciating as soon as it hits the road. Therefore, the amount that a car insurance company compensates for is often less than the actual cover that one needs. Thus, the difference or ‘gap’ between how much one owes and the worth of the car will have to be paid for by the owner unless he has GAP insurance.
Types of Gap Insurance
Return to Invoice Gap Insurance gives cash cover for the difference between the insurance cover that one is receiving and the amount cited on the invoice at the time of purchase of the car. The purpose of this policy is to ensure that the buyer does not lose any money.
Vehicle Replacement Gap Insurance gives coverage for the gap between the loss offer from the insurance company and the market value of the car. This policy is designed to enable the buyer to replace his/her vehicle with a new one.
Finance Gap Insurance gives coverage for the gap between the amount one still owes creditors for the repair of the car and the insurance cover one has received. This offer is mostly offered by car dealers but might prove to be a bit expensive.
How to get a Good Gap Insurance Deal
Gap insurance is not offered by all insurance companies but is commonly offered by car dealers. However, it is to be noted that dealerships offer these policies at a considerably higher premium than usual insurance. Various options are available on the numerous online Gap Insurance companies. It is often presumed by car owners that they will get a cover for the amount they paid or at least the amount that they owe. However, this is often not the case. Car insurance companies generally offer Gap insurance on an optional basis, which is available along with the coverage for physical damage to the car. Details such as these must be looked into and only after conducting one’s own survey should one decide on buying Gap Insurance.
[break]Affordable Auto Insurance
Affordable auto insurance refers to an auto insurance policy which offers low insurance rates and is, therefore, within the reach of the common people. These days, when a lot of auto insurance companies are emerging every day and competing to generate, it is not too difficult to acquire affordable auto insurance.
In order to obtain affordable auto insurance, one can follow either of the two options:
1. One can compare auto insurance quotes offered by different auto insurance companies by accessing the Internet. With these online auto insurance quotes, one can save a lot of time and money as compared to a personal visit to auto insurance companies.
2. Aspiring auto insurance policyholders can also contact an insurance agent in order to get an affordable auto insurance policy. An independent insurance agent can explain the coverage details of different auto insurance policies and can provide insurance quotes from several auto insurance companies.
Affordable Auto Insurance Discounts
Affordable auto insurance can be acquired if a customer is able to pull off discounts from the auto insurance company. There can be different types of discounts as mentioned below:
Multiple car discount: If a person owns more than one car, and gets all the cars insured from the same auto insurance company, s/he can get a good discount.
Multiple policy discount: If a person buys different types of insurance policies, such as home insurance policy, life insurance policy, health insurance policy and auto insurance policy, from the same insurance provider, s/he has a good chance of getting the auto insurance policy at a discounted rate.
Good driving record discount: If the auto insurance company finds that the aspiring auto insurance policy buyer has completed a driver’s education course and possesses a good driving record, this can also help in availing of a discount.
Safety features discount: If the car that is to be insured contains different safety devices, like anti-lock brakes and an alarm system, the car owner can expect to get some discounts on the auto insurance policy.
[break]Auto Liability Insurance
Auto liability insurance refers to auto insurance that provides liability coverage. In reality, we find that almost all auto insurance policies offer liability coverage. This is because the liability benefits are the insurance benefits that the policyholders most commonly require.
Buying an auto liability insurance policy is a must for all automobile owners.
Auto Liability Insurance Options
Owners can get two types of liability coverage under an auto liability insurance policy:
Bodily injury liability coverage: This pays for medical bills and lost wages. When other people suffer from bodily injury due to an accident caused by the policyholder’s car; then they can take legal action. In such a case, when a lawsuit is filed against the policyholder, the bodily injury liability coverage of the auto liability insurance policy provides legal defense to the policyholder.
Auto liability insurance generally offers dual coverage limit in case of bodily injury liability coverage. There are limits on the amounts that can be paid in maximum, per person and per incident of accident.
Property damage liability coverage: This covers the property damage expenses caused to others in a car accident by the policyholder. Such a type of coverage pays for the cost and replacement of the things that are damaged by the policyholder’s car. If the party who has suffered from the accident files a lawsuit against the policyholder, then this coverage helps the policyholder by paying his legal fees.
This type of liability coverage has a limit to the amount that can be paid per accident.
Auto Liability Insurance: Coverage Limits
Coverage limits in auto liability insurance can be selected by the policyholders. If they choose limits which are too low, then they remain exposed to financial risk. In case of any accident, if damages exceed the selected limit; then the amount above the limit will have to be paid by the policyholders. This may affect their savings and future earnings. Therefore, one should choose a liability coverage limit so that his/her current assets and future net worth remain protected, even in the case of a car accident.
Collision coverage under your auto insurance policy generally includes reimbursements for structural damage, functional damage and paint and body work associated with accidents. In some cases, the cost of fixing the car plus its salvage value will exceed the car’s working condition. For the “totaled” car, the insurance reimburses you based on the car’s fair market value.
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The Best Auto Insurance
When you first begin to look for vehicle insurance you need to constantly remind yourself that there are ways to save money on a policy. You do not have to break the bank in order to be adequately insured for any potential problem that occurs when you are in your vehicle. Go to Google on the net and look for a comparative insurance service. Type in your insurance information and search for basic coverage. You may be very surprised at what you find. From one company to another you may discover a difference of anywhere from $500 to $800 per year These things all play a role in finding the best auto insurance policy around.
Different companies look at different aspects of your driving experience differently. For example, a questionable credit rating may cause you to have higher rates at one company than another. Some parking or speeding tickets may cause your premiums to be higher at one company but not be as much of a problem at another. How accidents affect your insurance record tends to vary as well. All of these factors impact your ability to find an insurance policy that is suitable for you. This is why taking the time to shop around for the best auto insurance policy is in your best interests. This is true whether you are a first timer at this or whether you have been driving for many years.
It is essential that you know how much insurance coverage you require. The proper amount is not the same in every state. Before you can proceed further you need to know what your state requires of you. This information should be readily available over the Internet. Compile a list of the types of coverage you need versus what is available in the state where you live. You need to buy what your state deems as the minimum but you also need to protect your assets. The more you have, the more they require protecting. For example, if you have $100,000 in assets then buying $50,000 worth of bodily injury liability coverage is probably not nearly enough. Let the amount you have in assets act as a guide for you. Always remember the cardinal rule for best auto insurance, do not buy too much coverage if you do not have a great deal of assets.
[break]Direct Auto Insurance
Direct Auto Insurance is nothing but insuring an Automobile against all possible risks and requires that a person should pay the Auto Insurance Company a certain amount of money at regular intervals or pay a sum to get his car insured and in return the Auto Insurance Company shall pay all the Liability Costs, Repair Costs or Replacement Costs according to the policy in case of car accident or any other mishap involving the insured car.
The Possible Risks
· The first risk to which an automobile is exposed to is the risk of Road Accident. This accident may be a minor one or may be severe one. If a person’s new car meets a severe accident then one can easily understand the plight of that person. Other than the damage of his own car the person also becomes liable to pay for the damages caused to other car and others’ property. In this case only a Direct Auto Insurance can act as a savior to the car owner.
· Another risk is that a car can suffer from Vandalism which can result in severe damage of the car and the Repair Costs and Replacement Costs can be really high.
· An automobile is also exposed to risk of being stolen. If a new car is stolen then the car owner is bound to suffer from a huge Financial Loss. In this case only a Direct Auto Insurance can compensate his loss.
· A car can also be damaged by flood, storm or any other natural calamity.
