Auto insurance, the one expense of car ownership you cannot avoid without severe penalties.
If you do not have a car and are in the buying stages, before signing on the dotted line check with various insurance companies to see what the rates and coverage options for that particular car are. SUVs are more expensive to insure than cars, some cars are more expensive to insure over others.
Get an agent to tell you what factors can reduce your insurance bill. Some of these may include a passive alarm system, multiple cars on your policy, more cars than drivers, vehicle theft recovery (LOJACK is one of these), as well as a secondary restraint system (SRS); oh, and a great driving record helps.
If possible, try to get some of these features in a car you are purchasing to help keep insurance costs lower.
If you already have a car, you can still shop around to find the best price bearing in mind that the best price may not always mean the best service, or even good service. In fact the best price does not always mean best value. Research the insurance company to see how they rank in claims settlements, customer service, and rates. Do not purchase the cheapest only based on your premium payments. Many insurance companies may use your credit report results to determine your initial premium regardless of your past insurance claim history.
Once you have a car in mind (or in the driveway) and are making the plunge to call an insurance company, know beforehand how much coverage you want. Some things may dictate this for you. For example, if your car is financed, you will normally be required by the financial institution to maintain full coverage insurance. If the car is paid for and has a clear title (no liens) you may opt for liability only.
What add-ons do you want? How much of a deductible? Each of these can increase or decrease your premium.
Some of the things to know are:
How much coverage is enough?
Every state has minimum coverage you must maintain on your car. These coverage amounts are usually expressed in a group of three numbers. For example, $25,000, $50,000, $25,000 (25/50/25). These usually equate to Bodily injury, Uninsured Motorist, and Property Damage.
The minimum coverage is just that. The minimum, you cannot decrease these coverage levels any lower than what they are. However, you can increase from the state requirements.
Bodily Injury Liability coverage is sold in standard increments, typically it is $25,000/$50,000 or $100,000/$300,000. What these numbers mean here are if you opt for the 25/50 coverage, you will be covered per person in an accident up to $25,000 per person but you are limited to no more than $50,000 per accident. If more than two people are injured in one accident that is later attributed to you, the coverage you have would not be sufficient to cover you if each has $25,000 in injury expenses.
Personal Injury Protection you can skimp on this coverage if you have other insurance options. It is used to pay for funerals and/or medical bills associated with the accident for you and your family regardless of fault. Consider this, if you have policies in place for health, disability, and life, these expenses may be covered under those. READ those policies first to ensure coverage is adequate. If so, you can reduce your premiums by reducing this coverage. However, if you later cancel those policies or otherwise no longer have them, ensure you talk with your auto insurance agent to add them into your coverage.
Property Damage Liability coverage of this type is used to pay for repairs and/or replacement of cars and property damaged by you in an accident. State required minimums may be as low as $5,000, but if you damage a luxury car, that won't buy a fender in the repairs. A minimum of $50,000 is adequate in most situations for coverage.
Collision and Comprehensive this coverage repays you for the full cost of repairs after an accident. This coverage covers your vehicle from natural disaster damage, theft, and vandalism. There is a deductible; that is the amount you will pay out of your pocket for each incident. The lower your deductible, the higher your premium will be.
Many of the add-ons to your policy are what help to drive your premiums up. Rental car reimbursement, towing, roadside assistance, and full glass coverage are several of these add-ons. Of these, the most useful to you is the glass coverage. A stray stone can easily ruin a windshield in a second. Many windshields on newer cars can become quite costly to replace.
Once you purchase your insurance, there are a few things to remember.
If your car is financed, your insurance company will inform them if you cancel your policy or if it lapses due to non-payment. Insurance companies in many states also notify DMVs/DOTs of policy cancellations. This may cause a problem if you do not have coverage when your policy lapses. DMV/DOT may contact you requesting you provide proof of insurance coverage. If you fail to do so, it may cost your driver's license and/or the license plates of the car in question. Check to see if your state has this before allowing insurance policies to lapse or if you have a non-payment issue. If your state is one that does this, a fee of several hundred dollars may be required before your license will be reinstated.
Now you have found your company and have a car that is insured.
There is an accident what to do. FIRST NEVER ADMIT FAULT! What you may remember may not be the entire scenario that played out. The other driver may have done something you didn't know about that helped cause the accident. Let your insurance company and their insurance company work out fault. ALWAYS get information on the other drive and provide your information to them. ALWAYS call the police.
If you have full coverage and your car is damaged to the point it is not drivable, this is what you can expect:
Your car will be towed someplace. Ensure you know where your car is going before it leaves. Remove the registration from the glove box before they drive off, some places may require you to prove ownership if you must retrieve items from the car while on their lot. Remove all valuables from your car. It may not be going to a secure lot and there is no guarantee what is in the car will be there when you go to get it.
After fault is determined, normally based on who the police ticket, but other circumstances can dictate this, you will need a rental car if you do not have another car to drive while this is ongoing. Ensure you know how much will be covered by your insurance company (or the other driver if it is determined to be their fault) and how long you will be allowed to keep the rental while this is ongoing before they will stop paying and the bill reverts to you.
If your car is later determined to be a total loss and you have full coverage, the car will become the property of the insurance company. They will cut you a check and retain the car. If you wish to keep the car, most times you can purchase it from the insurance company in the condition it is in. The drawback to this buyback is the car will now have a "salvaged" title. If you attempt to resale it, the value will not be anywhere close to what a car without a salvage title would be.
It should only be considered if the car isn't as damaged as they think and you believe you can have it repaired where it will be safe to drive again. However, also consider that the insurance company considers components you may not be able to physically see as damaged. The frame, air bag replacement, and body sheet metal; as well as the engine or other components are all items that need to be inspected before deciding to buy it back.
Regardless of what insurance company you purchase coverage through, if you are careful and knowledgeable at the time of purchase, you should have a minimum of problems in the event you ever need to use their services.