Buying car insurance can be a very big expense on the household budget, especially if you have teenage drivers in the family. Add in the fact that every state has different liability requirements and things can get quite confusing pretty quick. It's good to know what is required and what everything in a car insurance policy means. So let's take a quick look at what an auto insurance policy really is.
Liability
This is what protects you in the event you cause an accident and hurt someone else, or damage property. Every state has there own liability requirements. Be sure to check what your individual state requires. Let's take an example of a policy with a liability limit of 100,000/300,000. The first 100,000 is the limit that the policy will pay for any one persons medical expenses. The next figure, 300,000, is the limit the policy will pay for all medical expenses for anyone in the accident.
It is important to note that liability coverage will not pay for any injuries or damage to your own vehicle.
Property Damage
This is the total amount that your insurance policy will pay for property that you damage if it is determined that you caused the damage. Generally, most policies have $100,000 as a property damage limit. You can increase that if you wish to. With the price of cars and property these days, it may be a good idea to increase that limit up to $250,000.
Comprehensive
This insurance coverage pays for damages done to your car. This includes theft, storm damage, fire and vandalism. This coverage will have a deductible attached. The rate for this insurance coverage goes down as the deductible goes up. This coverage will also be required on any loan you may have on the vehicle.
Collision
Collision coverage will pay you for damages down to your own vehicle in the event an accident is deemed to be your fault. If your vehicle is totaled out in an accident the insurance company will pay you the actual cash value of your vehicle. This could be less in some cases than what your vehicle is worth. Collision coverage is also required by finance companies on any loan against your vehicle.
Uninsured / Underinsured Motorist
Uninsured and underinsured motorist coverage will pay you in the event of an accident that is not your fault and the other party has either no insurance coverage, or not enough insurance. No matter what the law states, there will always be those who refuse to carry insurance. That makes having this insurance coverage vitally important.
Optional Coverages
There are many different optional auto insurance coverages that you can purchase on your auto policy. Some of these include emergency road service and rental car coverage. Both of these services can be a big help to you in the event of a claim.
By understanding the various auto insurance coverages you'll be able to determine what exactly you need for your particular situation. In the long run this will help save you money and give you peace of mind.
New powers now allow the police to seize, impound and crush any car found on the road without insurance. A pilot scheme was introduced in Durham last spring. Since then, police have impounded more than 1,200 cars. Of those around half have been crushed into cubes and packed off for smelting.
Operation Takeaway as the pilot scheme was known, has been such a big success, that police forces throughout the UK are enthusiastically polishing up their tow trucks. The scheme is now supported by a new national police database that's supported by the insurance industry. It enables the police to check the insurance status of every car in the UK whilst they're sitting in their patrol car.
Now if you're caught red handed without car insurance you're forced to hand your keys to the police at the roadside. There are no exceptions - this applies to everyone; it doesn't matter if it's just a forgetful mistake or conscious driving without insurance.
Then you'll have to get your skates on! You've just 14 days to produce a valid insurance policy to the police and collect your car. And other costs mount up. Before you can collect your car, you have to pay the cost of kerbside recovery (around £105) and the cost of secure storage - and that could easily amount to £15 a day. So, if you leave collecting your car to the 14th day, you could be in for a bill for £315.
And if you don't reclaim your car, off to the crusher it goes!
During the pilot scheme, the cost of crushing the cars was partly funded by Direct Line. They have estimated that Operation Takeaway prevented up to 2,000 accidents. And many of the cars impounded by the police were found to be un-roadworthy.
A police spokesman said, " Uninsured drivers are often guilty of many other offences. Such as having neither driving licence nor MOT certificate. We are doing everything in our power to get these dangerous and illegal drivers off our roads".
Indeed, uninsured drivers are much greater problem than many of us would expect. The Department of Transport recently reported that 1 in 20 motorists regularly drive without insurance. Furthermore, research from the Association of British Insurers discovered that uninsured drivers are amongst the most dangerous on the roads. On average they cause one accident every six months and are three times more likely to be convicted of driving without due care and attention.
And who pays for those uninsured accidents? We do! The average car insurance premium is loaded by £30 to cover the cost of damage caused by uninsured motorists. Across the UK that adds up to an extra £500 million paid out each year by the law-abiding motorists!
But that's not the end of our financial pain. If an uninsured vehicle collides into your car, it's still recorded as a "fault claim" on your policy. This means you'll have to pay the excess when your car is repaired and unless you've got Claims Protection on your policy, your no-claims bonus will take a knocking. Over a two-year period, the reduction in your no claims bonus could easily cost £275 in higher premiums.
The move to take cars off the road and crush them has been warmly welcomed by the Association of British Insurers. The ABI has long criticised the leniency of punishment handed out by the courts to uninsured motorists but they still want tougher penalties. Offenders are typically fined just £150 to £200 - with time to pay - and this is much less than the average car insurance premium. Surely this cannot be true justice!
Both Michael Russell & Michael Challiner 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.
Michael Russell has sinced written about articles on various topics from Celebrities, Dieting and Diabetes Treatment. Michael RussellYour Independent guide to . Michael Russell's top article generates over 2240000 views. to your Favourites.
Michael Challiner has sinced written about articles on various topics from Finances, Advertising Guide and Quit Smoking. Michael writes for Brokers Online who offer and most UK financial services including. Michael Challiner's top article generates over 165000 views. to your Favourites.