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Archive for the ‘Auto Insurance’ Category

It’s a dangerous world out there in the car.  Without the right car insurance, you could wind up paying outrageous sums of money if you’re ever involved in an unfortunate auto accident.  So how do you know which insurance you need?  Here we discuss comprehensive insurance and liability car insurance to help you figure out what kind of car insurance is right for you.

Naturally, you want to make sure that your vehicle is covered in the event that your car is involved in a collision.  But did you know that there are arrays of accidental circumstances in which your car can be damaged without actually being in a collision?  Vandalism, theft or attempted theft, fire, and unexpected weather phenomena such as hurricanes can all cause major damage to your automobile.  To safeguard against this, you’ll need comprehensive insurance.  (This type of insurance can also be referred to as “other than collision” insurance.)  Comprehensive car insurance protects your car from all accidents that are out of your control, or anyone else’s for that matter.  Hail storms, floods, bored teenagers with destructive tendencies – any of these can wreak havoc with your automobile, and comprehensive auto insurance covers them all.

This liability insurance, on the other hand, definitely involves collisions – the ones that you are responsible for.  If you’re at fault accident, you could be held liable for damage to either property (which includes the other driver’s car as well as any inanimate objects such as trees, etc.) or other people’s bodies.  Liability insurance is so important that it is required in most states in the USA, and the law establishes minimal limits for this coverage.

You want to get the highest level of liability assurance that you can afford, to protect yourself in case you’re in an accident with a car full of people or an expensive luxury automobile.  Check to see whether liability insurance policy features “combined single limit” or “split limits.”  Combined single limit insurance means that all of the costs are taken from a single limit amount, so all of the injury and property damage charges are considered together.  In the case of combined single limit insurance, the higher your limit, the better.  Split limits means there are separate limits for property damage and personal injury.  If you have split limits, you have to make sure that each limit is at a level you can be comfortable with.

These days, it’s simple to shop around for car insurance quotes online.  There are dozens of sites out there that allow you to compare quotes from different companies in one place.  Rates can vary widely, so make sure you do your due diligence since it will pay off when it comes to your monthly bill.

If you are looking for a new auto insurance policy or are applying for new one then there are some things that you might want to know first. Car insurance policy covers a lot of subjects. And it could sometimes be very hard to understand how these insurance companies come up with their rates. While all the information you give them are all the same, each company offer you different premiums. It could be very confusing if do not do a little research about it beforehand. Now, what you need to do is to understand the factors that determine their prices. But in all comes down to one thing: The more anxiety for the insurance company, the higher your premium.

Factors that Determines the auto insurance rates:

1. The major demographic factors
The demographic factors include your age, marital status, gender and geography. These factors substantially affect your auto insurance rates.

Your age for example, plays a significant difference in the insurer’s point of view. If you are aged 25 and below, you can expect higher premium than older people but people over 65 pays higher rate. People aged 16-18 and those over the age of 65 pays the highest premium, because they are considered high risk individuals. Teens are playful and adventurous, so insurance companies are actually scared of them. Those aged 65 and older are considered high risk as they have poorer vision and poorer control over the wheels, which again worries your insurer.

Your gender matters as well. Women get lower auto insurance rates than men. This does not mean that insurance companies are sexist. They simply base this on statistical record. Women drive safer than men. Almost 85% of accidents in past, showed that men were behind the wheels.

May be it’s because women are more cautious than men. Women are known to wear their seat-belts when driving. They add extra safety measure every time they go out and drive. Women get fewer traffic tickets. In conclusion, women pose lesser risk, hence lesser anxiety for insurance companies.

The marital status also affects you policy rate. Married women are more cautious when driving. They pose lesser risk than unmarried men. Insurance companies believe that married people are more concerned about their driving than unmarried people. They believe that married people are responsible and are stable drivers. So there goes another reason why you should get married.

The geography on the other hand also changes your auto insurance rates. If you live in a neighborhood where auto theft has been established, then expect to pay higher rates. If you live in an area where more claims were filed then you are living in a risky neighborhood, making your insurer more skeptical to give you coverage.

2. Vehicle classification
Your vehicle classification involves, the age and model of the vehicle, the market value of the vehicle, the number of vehicles you drive and the safety features of your car. The age of the vehicle is very important, as your car age, its repair and maintenance also decreases, so it means lower premium. If the market value of your car is high, then repair and replacement would be very expensive for the insurance company, therefore they will ask for higher premium. Now you should take a note about this, the vehicles you drive are already categorized. The insurance companies refer to this category when coming up with the premium. Here are the criteria:

Theft
This is determined by a statistical record confirmed by the police department. So basically, the equation is, the higher number of a certain car model stolen, the higher its premium rate.

Durability and safety
There are hundreds and even thousands of clients each insurance companies deal with. And so they based the car’s durability on the number of claims filed using a certain model. The higher claims, the higher the premium.

Car’s performance
If your car can amazingly go from 0 to 200 km, then what do you expect? Of course, more charges! Now about the number of vehicles you drive. The more cars you own the lower your charges. However if you are a family of 4 and you own two cars, then insurer would assume that each car would be for each parent. But if you bought another car, they will assume that the next car is for your teenage children. Therefore you would be paying for higher rates.

3. Minor demographics factors
Did you know that even your education background is considered by these car insurance companies? Well, they actually still base this on statistical record. You see if you are a college professor, they would think that you are a safe driver as compared to a hospital doctor.

But even so, there are some cases when a 22 year old honor student pays lesser premium than a 35 year old unmarried engineer. In most cases, if you have graduated from college, insurer thinks of you as a responsible person as compared to a non college degree holder. Although insurer will not admit it, it is a huge factor. Being unemployed means higher risk to them, so therefore you pay higher premium.

Another is you financial status also known as your credit history. If you have a perfect credit history then the insurer will give you lower premium. To them it signifies that you are a responsible person. If you have a credit score lower than 600 then you’re definitely paying for it.

Your insurer also takes your criminal records against you. If you have been convicted of something whether it’s for minor road violation or you are simply a tax invader, you would be charged with higher premium. So keep your records clean. It’s not impossible to do, just do not commit any crime.

If you have medical insurance or other insurance from the same company, you can expect lower premium. After all these insurance companies are greedy, they will extend your discount as long as you count as one of their biggest source of income.

There are many more factors that determine your auto insurance rates. With a little research and a little creativity, you would sure get around their policy. Be sure to ask at least six different insurance companies before settling for one. This will increase your chances of getting the best rate possible.