Your Car Insurance Agency
Should an accident occur, auto insurance protects you against financial loss. It is essentially a contract between you and the company you purchased the policy from. A premium is the dollar amount your carrier charges you for a policy. As long as you pay your premium, the insurance company will pay for any losses explicitly stated within the policy you purchased.
Usually, a car insurance policy will have a deductible. A deductible is the dollar amount required to be paid when damages occur as the result of an accident. The following coverage is available with vehicle insurance:
- Medical: This coverage pays if an accident causes the need for injury treatment, rehabilitation, and occasionally lost wages and funeral expenses.
- Property: If your vehicle is damaged or stolen, property coverage will pay for it.
- Liability: If the accident causes injuries or property damage to the other party involved, liability coverage pays for your legal responsibility.
When Do I Buy A Policy For My Vehicle?
During the process of buying a car, you need to think about your insurance needs to fit your budget. When researching for the perfect car, do not forget to search online for auto insurance quotes. Get quotes from more than three insurance companies. This way, you will be in a better position to find affordable coverage suited to your needs.
After finding out how much insurance will cost, you can sign the purchase agreement and buy an insurance policy immediately. The dealership will not allow you to drive off the lot without auto insurance. If you already have a policy for your current vehicle, add your new car to your plan. Also, remember to make changes to your coverage to facilitate the new ride. For instance, if you are taking out a loan for the vehicle, you may be required to add comprehensive or collision coverage.
If you make adjustments to your policy for the new car, the plan temporarily covers the vehicle. The period your car is covered depends on the rules of your policy.
Who Is Covered By My Auto Policy
Typically, your auto insurance provides coverage for your children, sibling, and spouse if they are licensed drivers. This applies if you live under the same roof. Some states and insurers require your household to share an auto insurance policy. Dependent children driving your car while away in school are also covered as long as they have your permission. However, permissive drivers are covered partially in a few states.
Your auto insurance also provides coverage for members of your extended family who live with you. They include:
If these drivers are driving your vehicle for months, your insurer may want you to add them to your policy. But if they are visiting and you lend them your car, they are covered under permissive use. Permissive use applies to friends who you give your car to drive occasionally as well.
For example, you let your licensed friend take over the wheel on a road trip. Your friend will be covered by your policy while driving. If you live separately from your boyfriend or girlfriend, they may drive your car occasionally and enjoy the coverage. However, if you live together, your insurer will want your significant other listed on your policy too.
What Determines Your Car Insurance Rate?
There is a myth going around that red colored cars are more expensive to insure. This is just untrue. The color of your automobile has nothing to do with your vehicle’s premium. Below are some of the factors that are considered when determining your rate:
- Your vehicle’s make, model, engine size, body type, and age
- Your age: Driver’s who are over 55 years old may be qualified for a reduction in their rates
- Your driving record: If you have any speeding tickets or have recent accident claims, your car insurance premium will likely increase. Fast drivers beware. When you have any speeding tickets you can expect to pay a higher premium or any of the following violations: reckless driving, DUI/DWI, leaving the scene of an accident, or failing to stop at a signal
- Your credit history and gaps in coverage: If for some reason you didn’t have coverage for a period, this could raise your rates. You may be considered a riskier driver because of the insurance gap(s). Most states will also allow insurance carriers to use your credit history when determining rates.
- The risk of theft and location: Where you live is a factor that is considered when determining your premium. Unfortunately, you can expect a higher premium if you reside in an area with high rates of theft. The risk of theft and location is also a very relevant statistic used when calculating your premium. Here is a list of most stolen cars in the US: 1994 Honda Accord, 1995 Honda Civic, 1991 Toyota Camry, 1999 Chevrolet Silverado, 1999 GMC Sierra, 1997 Ford F-150, 2004 Dodge Ram, 2000, Dodge Grand Caravan, 1994 Acura Integra, 2002 Ford Explorer, and 1999 Ford Taurus.
- Annual Mileage: Generally, the more you drive, the more you’re at risk of getting into an accident. That is why your premium may increase with your annual mileage.
Car Insurance Coverage Types For Your Vehicle
As a driver, you know the more protection you have, the safer you feel behind the wheel. The best auto insurance covers you and automobile and can help you get back on the road after an accident. Below you will find the coverages that are typical of a car insurance policy.
Bodily Injury Liability Coverage
Sometimes you make mistakes. That is why we call a car collision an accident; You didn’t mean for the crash to occur. When you are in a wreck and are legally responsible, bodily injury liability coverage is the portion of your insurance policy that will cover the cost of injuries to the other person(s) involved in the accident. If you are sued, this coverage all provides you legal defense. Bodily injury coverage will cover the following:
- Legal costs
- Medical fees
- Loss of income
- Pain and suffering
- Funeral costs
Property Damage Liability Coverage
In the event you are in a car collision and are found legally responsible, property damage liability coverage will pay for the other person or person’s assets. The definition of property in this situation could be any of the following:
- Automobile repair and replacement expenses
- Structural damage to a house, business, etc.
- Repair or replacement costs for other objects that may have been damaged by the crash
Property damage liability coverage is required in almost every state, but having more than the state minimum can be advantageous. It is moderately inexpensive to increase your protection, and the benefit you receive in coverage is substantial.
Medical Payments or Personal Injury Protection
This type of protections covers the treatment of your injuries or injuries to any passengers in your car at the time of the crash. Personal injury protection will also cover any lost wages and the cost of replacing necessary services that are ordinarily performed by the injured person(s). Some of the cost covered by PIP are as follows:
- Work loss
- Funeral costs
- Replacement services
Collision coverage is a type of assurance that is usually sold with a deductible. Generally, the higher the deductible, the lower your premium will be. This comes into play when you get into an accident with another vehicle or an object like a sign post, fence, or tree.
Comprehensive coverage is utilized in situations where the damage to your vehicle is not collision related. Examples of this include:
- Natural disasters
- A civil disturbance
- Falling objects
- Running into or being hit by an animal
If you are leasing your car or if you purchased it from a lender, comprehensive coverage is sometimes required. If you are unsure about this requirement, please reach out to your auto carrier to find out! If you don’t have one, contact a Tatum Insurance agent today!
Rental Car Reimbursement
Many car insurance providers will pay for rental car reimbursement as an add-on to your auto policy. If your vehicle is damaged and your policy covers it, your insurer will provide you a rental car while your vehicle is being repaired.
Uninsured and Underinsured Motorist Coverage
A 2012 statistic reported that 12.6% of drivers are uninsured. This is the highest uninsured driver percentage in any state. Uninsured and underinsured motorist coverage provides bodily injury liability and property liability coverage to you if you’re in any accident with an underinsured or uninsured driver. This policy only takes effect if the accident is the other party’s responsibility. Another important factor here is whether you live in a fault or no fault state.
What Happens If You Get A Wreck?
It is advisable to add gap insurance to your collision insurance. This way, your insurer pays the amount due for the car loan if your car is totaled in an accident. You now know how auto insurance works.