Will Your Auto Insurance Weather The Storm?
Severe storms can cause enormous property damage to your home. They can also do the same thing to your car. With storms getting worse, what can you do? Take a look at your insurance policy. “Too often, people don’t notice they lack certain types of coverage until they try to make a claim,” says Ron Berry, senior vice president of the Council of Better Business Bureaus.
In fact, the number of reported claims for vehicle losses due to severe storms nearly doubled in the first five years of this century, according to ISO’s Property Claim Services (PCS) unit, the recognized authority on insured property losses from catastrophes in the United States.
Fortunately, the Insurance Information Institute (I.I.I.), a nonprofit organization, says comprehensive coverage will reimburse you for loss due to fire, falling objects, storms, vandalism, animals and floods.
Comprehensive insurance usually has a %100 to %300 deductible, though you may want a higher one to lower your premium. Comprehensive insurance will reimburse you if your windshield is cracked or shattered.
“But, even if you have comprehensive coverage, it is not always guaranteed to meet your individual needs,” says Carolyn Gorman, vice president of the I.I.I. “For example, you may be surprised to discover that after a storm your auto insurance does not automatically cover the cost of a replacement rental car while your car is in the repair shop or you wait for authorization for a new car.”
She added that an individual could pay as much as %1,000 to rent a replacement car. “Rental reimbursement coverage, which is only a couple of dollars a month, covers the cost of a rental car while your car is being repaired or you are waiting for authorization for a new car. Renting a car for one day can cost more than one full year’s coverage for rental reimbursement,” Gorman said.
If your car is ever damaged in a storm:
• Know what your insurance covers. Don’t wait to find out it doesn’t include comprehensive or won’t cover emergency roadside assistance or a rental car.
• Report damage as soon as possible. If your car is not drivable, your agent or claims center may be able to save you time and money by having it towed directly to the repair facility and providing you with a replacement rental car.
• Know your deductible and any other additional charges before authorizing work. Expect your insurance adjuster, claims representative or repair facility appraiser to review the damage with you and explain the process, including the use of original or generic auto parts.
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What You May Not Know About Automobile Insurance
Perhaps the most commonly purchased type of insurance is automobile insurance, also called driver?s insurance or car insurance. Although laws vary somewhat, virtually all states today require drivers to carry some sort of automobile insurance to legally operate a vehicle on public roads. The penalties for driving without insurance can range from fines to a suspended license or, in the case of repeated infractions, possibly even a short jail sentence. Given that driver?s insurance is required in pretty much every state, it?s worth having some basic knowledge about the subject.
Types and levels of Coverage
The type of insurance coverage a person needs, and how much they will pay for that coverage, vary depending on a number of factors, such as the age of the driver, his or her driving record, the age and value of the vehicle, the dollar amount of the coverage, and whether the vehicle is fully paid for. While auto insurance can get pretty complex, there are four types that everyone should be aware of.
Liability coverage is the most basic type of coverage; it protects the driver against any claims that might be brought after an accident or other incident that is the driver?s fault. This is usually the minimum coverage that a driver needs to be considered insured. Liability insurance usually has the lowest premiums, but it doesn?t cover any damage to the driver?s own vehicle; thus a lower monthly premium needs to be balanced against the risk of a potentially large financial burden. Also, most loan lenders require a driver to carry comprehensive coverage until the borrower has paid off the loan in full.
Collision insurance covers part or all of the cost of repairs to the driver?s vehicle in the event of a collision, based on an estimate of the project cost for the repairs. While collision insurance can definitely pay for itself in the even of a car crash, the monthly premiums are higher than simple liability. Most policies are also subject to a deductible, which means that the policy carrier is responsible for paying a set amount before the insurance company pays. Deductibles vary widely; generally speaking, though, the higher the deductible, the lower the monthly payments, and the lower the deductible, the higher the monthly payments will be.
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Comprehensive coverage is typically required for vehicles that are still in the process of being paid for. Many vehicle owners also carry comprehensive coverage for expensive or otherwise valuable vehicles. Comprehensive coverage covers damage that isn?t the result of a collision ? fire, theft, vandalism, and so on ? although the exact items covered can vary quite a bit from one policy to the next.
Uninsured Coverage protects you if an uninsured or underinsured driver hits you or your vehicle. Although insurance is a legal requirement in most places, that doesn?t mean that everyone on the road is insured. This type of coverage means that you won?t get stuck with the repair bill if someone less responsible than you involves you in an accident.
Each type of insurance is available at several different levels of coverage; the higher the coverage (in dollars), the higher the premium will be. Premiums will also increase if the driver is involved in an accident or receives tickets for traffic infractions. Additionally, premiums are higher for males than for females, for younger drivers, and for drivers in urban or higher-crime areas. Despite this, however, automobile insurance is a necessity for any responsible driver.
Pssst – Want To Know A Secret That Banks & Car Insurance Companies Don’t Share With You
Every single driver in the U.S. is required to have Car Insurance. And most of drive around confident that we have adequate coverage to protect us should we ever be involved in an accident.
Yet, almost 97%PRCTG% of all drivers are not adequately protected….and don’t even know it. Here’s what I mean.
Let’s say you’re involved in an accident and it’s serious enough that the car is considered a “total loss” by your Insurance Company. Or, maybe your vehicle gets stolen. A few weeks later, you get a check from your Insurance Company.
When you look at the amount, you’re shocked. It’s thousands less than what you owe on your car. How can that be, you ask?
Well, like most, your policy has this short clause buried somewhere in all that legalese -
“In the event of a total loss, the policy holder will receive the actual cash value of the vehicle, minus any deductible.”
Did you catch the 3, very important words in that clause? The three words are – “actual cash value.”
Actual Cash Value means you’re going to get a get a check for….
“What it’s worth” not “What you owe.?
Isn?t that a nasty little surprise.
And like most, you owe quite a bit more than what the car or truck is worth. What would you owe your Bank or Credit Union if your car was totaled today?
So, how do you avoid this situation?
Well, when you buy a new or used vehicle, add a “rider” to your policy or purchase a separate “rider.?
If you have Homeowners or Rental insurance, a “rider” might sound familiar. For a homeowner?s policy, if you own expensive items, like fine jewelry, you need to add a rider to your policy. The reason – Insurance Companies won’t cover those types of items as part of a regular insurance policy.
So, you pay an extra %5 or %6 a month to have those items fully covered by the rider.”
If anything ever happens to the jewelry, it gets replaced.
A rider for your car or truck is called GAP Insurance or GAP Protection. It’s just like the rider for your Home – except it’s only for cars, vans, trucks or suv?s.
It covers “What You Owe”, not “What its worth.?
It doesn’t matter what the reason is – if it’s ever totaled due to theft, fire, accident, flood, tornado, vandalism, hurricane, it’s covered – and paid-in-full!
You can protect yourself four different ways.
1. Put at least 20%PRCTG%-30%PRCTG% down on any new or used car purchase to erase any gap;
2. Purchase a “Rider” – AKA GAP Insurance from your Car Insurance Company or Bank;
3. Purchase Gap Insurance from another Insurance Company;
4. Buy Gap Insurance from the Dealership you’re buying at.
Any one of these options is great way to protect yourself. Whether you’re getting ready to purchase a new car or truck, or purchased a vehicle in the last 2 years or so, make sure the “gap” between what your vehicle is worth and what you owe is covered.
Auto Insurance – How to Keep The Premium Down
Auto Insurance – Don’t Pay Too Much
All Auto insurance premiums and costs are based on statistics. These statistics involve analyzing accident rates and theft rates for the different makes and models of automobiles, under differing circumstances. It is for this reason that auto insurance is significantly more expensive for teenagers than it is for adults. But there are many factors that determine the cost of your auto insurance premium.
Lets take a look at the main contributing factors.
A. Deductible. Having a low or zero deductible on your auto insurance will significantly increase the cost of the policy. This is of course a tradeoff, because you are gambling on the fact that you won’t need to make a claim. You can pay up to 10%PRCTG% less on your annual premiums buy increasing the deductible. But a word of warning, if the time arrives to make a claim then you will be digging deeper into your pockets to pay for the larger deductible.
B. Crime Rate . If you are living in an area that statistically has high theft rates for your make and model of vehicle, then you will pay a higher premium. This is because your car has a much higher liklihood of being stolen, vandalized, or involved in an accident. There is not much you can do about this, you shouldn’t move location just to cut your auto insurance costs. Don’t make the mistake of asking one of your family who live in the rural if you can use their address for your auto insurance. If the insurance company discovers this, you may be in trouble when its time to make a claim.
C. Garage Parking. The majority of auto insurance companies will give you to a slight premium reduction because cars parked in a garage are less likely to be stolen, vandalized, or damaged.
D. Mileage. Some companies have a low milage discount if you drive less than a certain number of miles in a year. This is often difficult to become eligible for because you will need to limit your driving in order to qualify.
E. Anti-theft Alarms Most auto insurance companies offer policy discounts if your car is equipped with a safety device or antitheft device
F. Shop around to find the cheapest auto insurance available. Get a quote from every reputable auto insurance company in your town or city. Most reputable insurance companies are on the internet and its easy to get online quotes.
F. Insurance Consolidation. Most insurance companies will give you significant discounts if you have all your insurance policies with the same company.
G. Driving Courses. Most companies are now reducing the policy for people who take a driver education course. This mainly applies to new drivers. Insurance companies like to know that you are driver educated and therefore statistically have less liklihood of an accident.
H. Being Smart Helps. Many car insurance companies are now offering discounts for higher than average grade students.
7. No Claim Bonus. Most insurance companies will reduce the premium every year if you don’t make a claim. Every year your premium will reduce if you do not have an accident.
8. Sports Cars Pay The Price. If you have a high performace sports car then you better dig deep. Sports cars and up market luxurious cars are the most expense to insure. Many times the cost can be double or more than a standard family car.
So finally, to save on your auto insurance premium costs its a matter of keeping the above factors at a level that are in your favor.
5 Quickest ways to lower your Auto Insurance Premium
Are you looking for ways to lower your Auto Insurance Premium? Auto insurance rates can spiral depending upon factors that include your age, past driving record, and other factors such as credit history. However, the trick is to find ways to lower the annual pay-off. We have pulled up for you the 5 quickest ways to lower your Auto Insurance Premium.
Tip 1: Hike up your deductible
Stop trying to get the ?lowest deductible?, instead go in for a comfortably higher out of pocket payment plan. ?Deductible? is the amount that you would pay before your insurance policy kicks in. This is an easy way to reduce your periodic premium amount, however, be warned, in such a case, if something happens to your vehicle – you need to shell out more to cover the initial expenses, prior to going in for a claim.
Tip 2: Park your vehicle in a garage
One of the simplest ways to cut down on insurance premium is to park your vehicle in a garage, personal or commercial establishments. This helps in knocking off, in some cases, close to 20%PRCTG% of the premium. In a garage, the chances of your vehicle getting stolen or sideswiped are considerably lower. From a transaction perspective, parking in a garage could mean a difference between a preferred rate and a standard rate.
Tip 3: Shop around and bargain
Nothing beats the traditional ?shop around to bargain?. Make sure you at least have three to four price quotes with you, prior to fixing on the service provider. Ensure that you are not shopping for price alone, but the whole deal.
Tip 4: Take a Defensive Driving Course
Not many people are aware of this. By volunteering for a state-approved defensive driving course, you can avail discounts in premium of up to 10%PRCTG%. However, do cross check with your insurer on this.
Tip 5: Downsizing Coverage
Well, downsizing coverage is perhaps the easiest way to lower your auto insurance premium. However, we suggest you to be careful and prudent, while taking this decision. This might save money, but, would also limit coverage.
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