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When you got your first car, you probably simultaneously purchase your first auto insurance policy. You may have done so without much thought. Perhaps you purchased the most affordable policy with the coverage your lender required. If so, you should take the time to learn a little more about how car insurance works, so you can better understand the policy you own.
Types of Car Insurance
Understanding how your car insurance works begins with understanding the different types of coverage and which ones your policy has. All car insurance policies have liability coverage. This is coverage that pays the costs of injuries or damage you cause to someone else or another vehicle in an accident. Most states require this by law.
Collision coverage is another common type of coverage. It pays for damage to your vehicle in a collision, even if you were entirely at fault, or if you gave someone else authorization to drive your vehicle.
Comprehensive coverage covers other types of damage to your vehicle. For instance, theft, vandalism, natural disasters, or damage caused when your vehicle is parked would be covered under a comprehensive policy. Many lenders require collision and comprehensive coverage on vehicles that have loans on them.
These are the three basic types of coverage. You may choose to add medical payments coverage, which pays medical bills of people in the vehicle if they are injured in an accident, even if you cause the accident. You may also choose personal injury protection, which is a similar type of policy but also covers lost wages and other expenses. Uninsured motorist or underinsured motorist coverage is also popular. This coverage will pay for repairs to your vehicle if someone driving without car insurance causes the accident. Each states have certain requirements on the amount of insurance drivers must have, so check with your insurance agent to ensure that your policy meets these requirements.
Basic Policy Terms
Your car insurance policy has a deductible. This is the amount you must pay out of your own pocket for covered expenses before you will receive any insurance money. Raising your deductible can lower the cost of your premium. Your insurance provider builds deductibles into the policy to keep you from making a very small claim that will cost them a tremendous amount to process and pay.
Insurance policies also have limits or policy caps. For instance, your insurance policy may cover up to $20,000 in damage to your vehicle and $50,000 in medical coverage. Each state has minimum required coverage amounts, but these minimum amounts are typically very low when compared to the amount that you might need after an accident. Make sure that your insurance policy has adequate coverage. Keep in mind that the lower the policy caps are, the lower the cost of the insurance will be. You want to choose a policy that balances well between a generous policy cap and an affordable premium.
How Insurance Pays After an Accident
If you are in an accident that causes damage to your vehicle that should be covered by your insurance policy, you will submit the information about the accident and the damage to the insurance company. They will send a claims adjuster to survey the damage and provide you with instructions on how to get an estimate on the cost of repairs. Once you have the estimate, the insurance company will send you a check to use to pay for the repairs on your vehicle.
If the accident caused an injury that required medical attention, your medical bills will be sent to the insurance company. Many insurance providers will pay in one lump sum when your treatment is complete. Keep in mind that the insurance provider will only pay up to the policy cap, and you will be responsible for any deductible on the policy.
Car insurance is a necessity, not a luxury. If you are not currently insured, you need to purchase a policy immediately. Understanding how these policies work will help you choose the best possible one for your needs.
Surely, there are times where people who use credit cards experience stressful and depressing situations, especially when delinquency is involved. It is now a common to see consumers stressed because they have got low credit scores, were trapped in a large amount of debt and worse, closed their credit accounts and filed a bankruptcy. Truly, financial mismanagement is one of the biggest problems that credit consumers face.
It is important for you to take note that actually, convenience is the reason why consumers actually choose credit cards for their respective expenditures. However, it is also true that convenience is also the reason why credit consumers fall into the trap of financial mismanagement, ending with an extremely low credit score, huge amounts of debt, and financial insecurity. This surely is a very depressing situation.
However, there are also instances wherein insult is literally added to injury. In fact, there are credit collection companies that literally insult delinquent payers, which surely end up with you having more and more frustration. Remember that being stressed because of a low credit score is different from being insulted in the telephone by credit collection companies to pay your dues. The sad fact is that, many consumers are victimized by such harassing credit collection agencies, which often results to insults, threats, and manipulative calls.
Remember that any collection agency does not have the right to do so. In fact, there is a law that actually protects consumers from harassments and grave threats that credit collection agencies use to collect dues from delinquent payers. This law is called the Fair Credit Collection Act, also known as the FCCA. The FCCA is specifically designed to protect consumers from unjustifiable collection behaviours of all credit collection agencies.
It is important for you to take note that before, there are actually many instances wherein complaints are filed because of rude credit collection agencies. This is what the FCCA is all about. The FCCA actually set guidelines on how the collection agency, as well as the debt collector itself, collects overdue payments from delinquent payers. In this law, even though you are a delinquent payer, you still have the right not to be harassed and threatened by credit collection agencies.
Remember that even though you are actually a debtor, you are still a consumer. And consumers still has rights that must be respected. In this case, even though you may have the lowest credit score possible, or have the highest debt incurred, you are still a consumer, and you have still rights that credit collection companies must respect. In no way can any situation provide a reason for you dignity not to be respected.
Take a look at the following basic propositions that the Fair Credit Collection Act forwarded:
1. Use obscene profane language use constantly use the telephone to annoy
2. Publish a list of consumers who refuse to pay their debts unless in credit reports
3. Use threats of harm and violence
4. Use misleading statements such as you will be arrested if you don't pay your debt