Frequently Asked Auto Insurance Questions

Usually policyholders like to get good value for money while getting protected properly. Here are frequently asked car insurance questions and answers. We mainly discuss purchase and coverage concerns on this post because prices and provisions are determined at this stage and therefore motorists should pay attention at renewals to get it right. We have a few posts on this website dedicated to addressing other issues and you can find them by using the search box on the top or checking FAQ category.

What to Consider when Purchasing Automobile Insurance?

It is a process requiring some thoughts. You want to make sure that you get value for money and at the same time get protected properly. Here are a few points you should consider in the process.

1.    As well as the price, try to get as much coverage as you can for the same money. Also, think what is important for you in a policy and try to achieve it. For example, do you care more about claim handling or prefer to get the cheapest premium now and not much worried about being paid a bit early or late should you require compensation in the future?

2.    Buy good level of liability auto insurance, not just the minimum legally required. The cost is not really going to be much different. Get quotes for various limits, if you don’t believe us.

3.    Next step is to look into optional coverage. This part is mostly about protecting investments on cars. Also, you could buy Personal Injury Protection for yourself and family if this is not already included in the state minimum requirements. Don’t forget Uninsured Motorist Coverage as well.

4.    It is time to shop for cheaper automobile insurance quotes to get what you need at a price you can manage comfortably. You need to see the options before you can make a healthy decision. It wouldn’t be wise to go with only one quote.

5.    Lastly, you probably have a preference as to who gets the money. Maybe you prefer smaller or bigger, mutual or stock companies. Often, people wouldn’t mind spending a little bit more and choose the name they like most.

How to Lower Car Insurance Premiums?

There are a few discounts that may be applicable to you. The obvious ones are good driver and no claim. You can get as much as 40% savings if you haven’t had any accident and traffic ticket in the last three years. Zip code, age, gender, marital statues and credit rating will be very influential on the premiums too. You can also save money on vehicle insurance with defensive driving courses or buying a safer automobile.

The rates would naturally be lower with multi-car policies and when combining home and automobile. One other thing you could do to make it affordable is to play around with deductibles. If you could get considerable discounts for increasing them it may be a good option especially if you are a good driver who does not expect incidents or live in a safer neighborhood with little crime.

One way of finding lower prices is to shop around regardless of history, cars owned or claim records. To do this effectively, you should get several quotes or ask a broker to search the whole of the market for you. This is a simple and effective method and you can complete it in a few minutes.

Just remember that you compare oranges with oranges by making sure that every company you apply quotes on the same bases. Also, check if there are special conditions imposed in return for cheaper prices.

Is It Worth Getting Full Coverage on an Old Car?

It is not a sentimental decision. It is a financial product to secure assets and defend against third party liabilities. If you feel that the losses are acceptable to keep in house you don’t need to safeguard them. For example, if a car is worth about $4,000 and you have the financial means to cope with such loss you may choose not to insure it and keep the additional premium payable in the pocket. It is a small risk to take and it can pay off nicely.

However, you should get quotes and look at the options before deciding on dropping collision insurance or any other components. Say, you have two cars, one is brand new and the other one is older. You can probably see that you need to protect the new one but thinking about the old one. Perhaps, you can get a quote to include the old one under the same policy as the new one. Remember, underwriters are smart and they can see that you are only keeping the old one as a backup and you can only use one car at a time. Then, you shouldn’t and wouldn’t spend much for the old one.

Always look to see if there is a smart way of handling risks rather than seeing it as a have it or not decision. Again, you can increase deductibles and save money that it does not become a financial worry any more.

Can Someone Drive my Car and Be Covered on my Insurance?

With a standard policy people who occasionally drive the automobile would be included. Remember that yours would be the primary for liabilities and physical damages to it even a friend has own policy. Also, if a friend has an accident it will go down as a claim on your policy. If they have more than occasional access to the automobile you should consider including them as listed drivers.

You should always check if there are special conditions that prevent lending the auto. Some policies may only allow drivers over the age of 25. It is always best to check.

What Is the Difference between Collision and Comprehensive Coverage?

Collision is defined as losses incurred when it collides with another vehicle or object. For example, any traffic accident damages or hitting the mailbox will be included in this component.

Comprehensive provides for most other direct physical losses the vehicle suffers. These are theft, vandalizm, hailstorms, floods, animal collisions, fallen objects and any other accidental losses.

When Do I Need GAP insurance?

Whether the automobile leased or has an outstanding loan, Guaranteed Auto Protection serves a valuable purpose during the early years of the vehicle’s life. It is no secret that a new car’s value drops the minute it is out of the lot. If a bus runs into the side of it five minutes after you drive it off the lot, the carrier only covers the actual cash value of it. At this point, there’s a good chance the payoff isn’t enough to close outstanding lease (or loan) balance.

If a loss occurs (theft, total loss in a collision, etc.), GAP will pay the difference between the actual cash value of the car and the current outstanding balance on the loan or lease. Some lenders and lessors actually require GAP coverage until the outstanding loan/lease amount drops below the value of the vehicle or the loan is paid off.

It is typically not very expensive, since the amount is relatively small. However, the cost will vary depending on the type and value of the vehicle.

These are only few questions we could handle in this post. A quick search on the site will probably address any other concern you may have. Just check before leaving us.

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