Understanding The Basics of Auto Insurance
To get the best possible insurance rates it is necessary to shop around. This can sometimes be an arduous process, but before you delve into your search for low cost auto insurance it is important to understand some of the basics aspects of insurance policies. These are some of the basic insurance policy components:
Deductible
The deductible on your insurance policy can affect your monthly premium greatly. When you lower your deductive, your premium will be higher. If it is affordable, increasing your deductible to $1,000 will decrease your insurance premium. This means that you will have to pay more money out of pocket in case of an accident, but will have lower monthly insurance payments.
Discounts
Insurance companies tend to partner with other businesses and organizations. These can range from credit unions, alumni associations, to banks. Sometimes it is possible to get a discount on your insurance premiums if you qualify or are a member of a partnered affiliate. If you have multiple drivers on a policy try to have the driver with the best driving record as the primary driver as this may also save additional money. Another effective method of lowering your monthly insurance premiums is to have multiple policies such as your car, home, or renter’s insurance with the same company.
Liability Insurance
Getting liability insurance is recommended if your car is not worth a lot of money. Liability will cover the other car in case of an accident if you are at fault. This insurance will also pay for any injures to other people and other damages to the car. This insurance costs less money than full coverage but is not recommended if you have a valuable vehicle.
Driving Record
Your driving record and type of policy affects your insurance premiums. If you have a good driving record and are over the age of twenty five, insurance rates tend to be much lower. Also if you record has been in good standing for the last three years you may also be eligible for premium discounts so make sure to have your insurance company evaluate your insurance policy and record.
Comprehensive Insurance
This feature of your auto insurance policy covers your car if an incident were to happen to it that is not an accident. For example, comprehensive insurance covers flood, hail, theft, and damage from storms. This insurance is necessary in most cases if there is an outstanding loan on the car as it will cover you for a replacement for a car of the same value. Comprehensive insurance is highly recommended unless you have enough money to cover repair costs or a replacement vehicle.
Collision Insurance
Collision insurance pays for repairs or for the replacement of a vehicle that was damaged in an accident. This policy will fix your car or replace it for one with similar value. For example, if your car was five years old and you were in an accident where the car was totaled, the insurance company would issue you a check to buy a car that was in the same condition and age of your car. Collision insurance is necessary if you are leasing your car or if you have an outstanding loan on it as it will allow you to replace you vehicle after an accident.
There are many useful tips and advice on car insurance online, so make sure to do your research before making a purchase.