Auto Insurance – What You Don’t Know Could Cost You Money

Auto Insurance – What You Don’t Know Could Cost You Money

What you know about auto insurance coverage options can help prevent future liability problems. And, that knowledge can come in handy when it’s time to shop around for a better rate or simply to find coverage that suits your every need. Those coverages are out there, but you can easily fall short of what you want, if you don’t know exactly what you’re looking for.

If you’ve purchased or are leasing a new car, financed through a lending institution… you have no choice in the matter. They’ll obligate you to, not only, purchase the state mandated minimum liability coverage, but also carry comprehensive and collision coverage to ensure their car is protected until you make that final payment that says it’s yours.
• Full Coverage – This basically means that you’ll have to cover your new ride with full coverage or comprehensive and collision protection, until that happens. With this type of insurance, your auto insurance company will pay for your vehicle to be replaced, should it be stolen or destroyed in a fire, or repaired following an accident, minus your deductible, according to your policy.

• Liability Coverage – When your vehicle is covered with liability coverage only and you’re involved in an accident that is found to have been caused by you, your insurance company will pay for damages to the other driver’s vehicle. And, if the accident results in injuries, if you have the minimum required liability coverage, you could be forced to pay out of pocket for any amount over those minimums.

For example, let’s say you actually have more than the minimum liability coverage of 50/200/50 as stated in your policy. In this case, your insurance company will cover $50,000 per person in bodily injury, $200,000 per accident bodily injury (which is the total medical expenses incurred for all persons involved), and $50,000 for property damage.

Should the other party claim the costs exceed $250,000 for total bodily injury and their vehicle was an expensive, high-end luxury car that’ll cost $60,000 to replace…you’ve exceeded your liability limits, which means you’re out of pocket the additional $50,000 for the injuries and $10,000 for the vehicle replacement. Imagine what might happen if those numbers were real and you carried the Texas minimum of 30/60/25.

• Deductibles – Your deductible can often be one of the many culprits that cause your insurance premiums to be high. Some new car lenders may limit the maximum deductible they will permit. Most banks prefer an amount no higher than $1,000 or $1,500. That said, remember – the lower your deductible – the higher your annual premium – and, vice versa.

• Discounts – All insurance companies offer their policyholders discounts. The idea here is to take advantage of as many as you qualify for. Doing so could save you several hundred dollars a year. From multi-car, multi-policy, good driving, to good grade discount for your teen driver, the money-saving opportunities are there for the taking. Not to be ignored, discounts are a great way to lower your premiums.

• Your choice of car – While the car you drive can affect your insurance rates negatively, it can also help you in a positive sense. With all the standard safety features installed in newer cars, insurance companies are ready to evaluate your policy based on how safe your car is. And, those features can actually save you some money.

The main rule of thumb to remember is – a two-door coupe will cost more to insure than a four-door sedan. A four-wheel drive pickup truck will cost more than a minivan. And, a powerful sports car…well, you get the idea.

Many factors go into calculating how much you’ll pay for auto insurance, but if you know what you need and how to go about getting it, you’ll be a happier policyholder.
Saving money makes everybody happy; so, make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?

Do you consider yourself knowledgeable when it comes to auto insurance? Feel free to share your thoughts in the comments section below.