Online Auto Insurance Basics

If you are a US motorist, the human conscience dictates that you carry auto insurance policy as this takes care of you during an accident and the ones affected by it. Furthermore, most US states compel its motorists to carry insurance policy before they can drive around.

Let’s discuss the different auto insurance policies offered in the market today. The first one is liability insurance. Now, there are two types of liability insurance: bodily injury and property damage. Now, we would often see numbers such as 25/30/25 when we go through auto insurance literature.

This means that the auto insurance company will pay up to $25,000 for bodily injury per person, $30,000 per accident, and $25,000 for property damage per accident. So, if this is what you have in your policy, we can see that the amount of coverage is a little low. You need to assess your situation and lifestyle and decide what is best for you. As mentioned before, almost all US states require its motorists to carry liability insurance. New Hampshire and Wisconsin are not part of this group.

Then we have collision insurance. If you figure in an accident, damaging other properties in the process, and it was your fault, this would the policy that will cover the damages and medical payments.

If your car gets vandalized, flooded or catches fire, comprehensive insurance will cover you. Comprehensive insurance kicks in when the damage to your car is not caused by collision.

Now, there are motorists out there who will drive around without auto insurance coverage. If you get in an accident with one, your uninsured/underinsured motorist insurance will rush in and cover you. Uninsured/underinsured policy takes care of you when the other driver does not have insurance or has insufficient coverage.

Then there’s PIP or personal injury protection. PIP covers medical bills and other expenses, such as wage loss and funeral expenses, caused by the accident. This will cover you whether or not the accident is your fault or not. PIP is now required in 16 states.

Now, we get to "no-fault" auto insurance. Its name has confused a lot of motorists over the years. Under this system, the auto insurance company will pay for the damages you incur because of the accident. In a no fault insurance system, each driver in an accident pays for his or her own damages. There is no need to find who is at fault under this insurance program. Because of this program’s nature, people thought that this would minimize the number of lawsuits caused by road accidents. This was not the case as statistics showed that accident rates and costs went higher, so did insurance premiums.

Because of this, no-fault laws have been repealed in some states that had enacted the said program. These states were Nevada, Pennsylvania, New Jersey, Georgia, Connecticut, Colorado, Florida and DC. The rest of the states that had the "no-fault" law still have them. NJ and PA now allow their drivers to choose between a no-fault and a regular auto insurance policy. The effect of this option on premium levels in these states has not been conclusive, so far.

Cheap Premium Rates

For us average consumer, premiums rates can be hard to decipher. Somehow, it defies reason. Auto insurance companies seem to have a weird way of computing your insurance premium and increasing them. If you were in a car accident, your insurance premium will increase even if you were not the one at fault. It does not matter to them where you caused the accident. The accident goes against you just because you got yourself in the position to be a part of an accident.

It’s an uphill climb, so it seems. We need to work hard and come with factors that can lead our auto insurance companies to give us discounts or, at least, reasonable premiums. There several factors to consider if we are going to affect the way our insurance companies come up with our insurance premiums. The first factor they consider is age. Females get lower rates than male.

If you’re a male and you’re 25 years old or younger, you’re bound to get higher rates. Not much we can do there but wait till you get older. They’ll check your location, too. Folks from urban states get higher rates than the ones living in rural states. NC and CA residents get higher insurance premiums. If you’ve filed a claim or claims in the past five years, this will increase your premium rate. If you got a speeding ticket or other traffic violations, your auto insurance company will found out about and they will increase your premium rate.

They’ll check your car, too. Cars that are expensive to repair, expensive cars usually are, get higher premiums. There are cars that are prone to theft like the Toyota Camry and Honda Accord. If your car belongs to this list of theft-prone vehicles, you will get high premiums. Off-road vehicles and large SUVs will have the same effect on your premium, too.