Auto insurance is a type of insurance cover, and like other forms of insurance is designed to protect you, others, and even your belongings. The difference between auto insurance and other forms of insurance cover is that you do not have to take out other forms of insurance cover if you do not wish to but you have to legally take out auto insurance if you are driving a vehicle on the road, whether for pleasure or business reasons.
Auto insurance is necessary because as well as protecting the policyholder it also provides protection for other people.
The cost of auto insurance can vary but has gone up over the years – it can be very high for people that have sporty cars, those that have past claims or driving convictions, and also for younger drivers
When it comes to auto insurance there are three different levels to choose from, and the level that is right for you will depend on your needs, circumstances, and pocket
The most basic level of auto insurance cover is known as third party only cover, and this is the cheapest types of cover and provides very little protection for the policyholder, although it still protects third parties who suffer loss or damage as the result of an accident that was the policyholder’s fault
The next level up in terms of auto insurance cover is third party, fire, and theft cover. With this level of cover the policyholder is covered in the event of fire damage to the vehicle or theft of the vehicle, as well ash third parties being covered for loss or damage, so the protection level of this level of cover is higher than with third party, but the cost is also higher
Finally there is fully comprehensive auto insurance cover. You will pay for this level of cover, as it is the most expensive. In addition to offering all of the benefits of third party, fire, and theft cover the fully comprehensive policy also pays out for repairs to your vehicle even if the accident was your fault.
So, how can you try and cut the cost of your insurance premiums at a time when finances are already strained enough for most households? If you have a cheaper, older vehicle then you could opt for the most basic level of auto insurance cover, which can help to keep your premiums down as much as possible
Another way to cut the cost of cover is to shop around and compare premiums from different providers. The cost of cover car vary widely from one provider to another, and this means that by shopping around you could save a fair amount of cash on the cost of your cover
You will find that the Internet is a great way to save money on the cost of cover due to the choice of insurance firms operating online, and the choice of policies available
If you use the Internet you can choose from a range of price comparison sites that will allow you to quickly and easily check the suitability and the cost of the policies
To save some more cash on the cost of cover consider going for a vehicle with a smaller engine, or even taking your pass plus test to cut the cost of insurance premiums.
These are just some of the steps that you can take to reduce the cost of your insurance premiums and enjoy more affordable motoring
Calculating exactly how much auto insurance you should buy can sometimes seem to be a quiz fit for a mathematician. Every state has some guidelines and ‘must-haves’ in their requirement for auto insurance. One can use this as a sort of starting point, but there is a lot more that needs to be seen and evaluated.
Broadly speaking, there are 6 basic parts of an auto insurance policy. These are: Bodily Injury Liability, Property Damage Liability, Personal Injury Protection, Collision Coverage, Comprehensive Coverage and Uninsured Motorist Coverage. In most states, it is important to include the first two parts in the policy while the others may or may not be mandatory.
Bodily Injury Liability - Insurance companies generally recommend a minimum of $100,000 per person and $300,000 per accident for bodily injury liability coverage. Being underinsured for this coverage may be harmful for the insured as he can lose his assets in a lawsuit resulting from an auto accident in which he is found to be at fault.
Property Damage Liability – The recommended coverage is a minimum of $50,000. Like in the previous case, the insurer stands to lose his assets if not adequately insured.
Personal Injury Protection (PIP) – PIP coverage ensures that the insurance company pays for the medical expenses and/or any lost wages and other costs that may arise when the insured is injured in an accident. Minimum PIP coverage of $10,000 is usually recommended. The insurer generally pays around 80 percent of the losses and also pays a death benefit. It may also cover the medical expenditure of the passengers of the insured as well. The expanded version of this coverage is called ‘no-fault’ coverage wherein the insured gets the insurance amount irrespective of whose fault it was. In some states this too may be mandatory in order to provide for child care and lost wages.
Collision Coverage – Collision coverage pays for the repairs of the car after accident and is normally the most expensive component of the auto insurance. One can lower this amount by having a higher deductible. This means that the insured is taking the risk of accident free driving upon him. If he is involved in an accident, he will have to pay up a higher amount before the insurance company chips in. It might be a good idea to get the vehicle’s value assessed before deciding upon how much cover one would like to take.
Comprehensive Coverage - Comprehensive coverage pays for damage to the car of the insured resulting from fire, theft, vandalism, windstorm, glass breakage, and the like. Like in the above case, assess the vehicle's value to make sure it's worth the amount that this coverage costs. This coverage too comes with a deductible and the insurer will not pay more than what the car was worth when it got wrecked.
Uninsured Motorist Coverage – This coverage pays for the injuries of the insured even if he is hit-and-run by a driver or someone who doesn't have auto insurance. As the number of uninsured and underinsured drivers is high, it is recommended that a minimum amount of $100,000 per person and $300,000 per accident be allocated under this coverage. This coverage is not important if the ‘no-fault’ coverage is in action.
Take the above points into consideration and then gauge your actual insurance requirement. If required, take quotes from several insurers before deciding upon the insurance value that you need.
Both Alisdair Cosgrove & Jon Atkinson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Alisdair Cosgrove has sinced written about articles on various topics from Auto Insurance, Credit Cards and Insurance Quotes. Alisdair Cosgrove is an expert in the field of auto insurance and has been writing articles on the web for many years and can find more of his work at the insurance site Ridoe.net, offering. Alisdair Cosgrove's top article generates over 74000 views. to your Favourites.
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