When people talk about a typical policy they refer to standard car insurance coverage that is offered to average motorists, who have sufficient experience and acceptable record. They follow the common industry practices in the way they insure vehicles and drivers and stay within the usual limitations and restrictions. Most applicants can get good quotes as long as they don’t have something serious against them to drag the rates down.
What influences how much premium you pay isn’t usually the rates applicable to you but how much discounts you can get.
For example, someone with a clean record for at least three years and another with a recent claim get charged the same rates. However, the former gets large discounts for being careful. Discounts can vary as much as 50%. Essentially, you need to qualify for discounts if you want cheap quotes.
Premium calculations are based on risks associated with insuring particular drivers operating the car at and around the given address. Therefore you may be average but cannot qualify for ordinary prices due to owning a high risk car or living in a high crime and accident zone.
Sometimes, being different like having a foreign license, owning an antique automobile or living with a teenage roommate can prevent you from getting a widely available plan. When this happens you may need to look for high risk companies.
Standard Automobile Insurance Coverage
Probably the best way of describing it is that it is a commonly sold policy without onerous limitations, restrictions and conditions. Some companies can deliberately break away from generally accepted and understood industry practices by imposing special conditions in return for offering cheaper premiums or to reduce the risks they face. Most underwriters follow industry norms.
Usually a typical auto insurance policy offers much larger coverage than state minimum. Large numbers of traditional carriers prefer not to offer basic coverage because they don’t want the type of motorists who only care about complying with state laws. That is why they come with higher levels of liability limits like this.
$50,000 per person for bodily injury
$100,000 per accident for bodily injury
$50,000 per accident for property damage
Better ones offer even more as below.
$100,000 per person for bodily injury
$300,000 per accident for bodily injury
$50,000 per accident for property damage
You should increase it even further (see below) if you can afford it.
$250,000 per person for bodily injury
$500,000 per accident for bodily injury
$100,000 per accident for property damage
Naturally, better liability coverage is likely to cost more but most companies, agents and experts believe that most state minimum requirements aren’t sufficient and you need to increase them. Otherwise, you run the risk of losing your house or other possessions in case you cause accidents that exceed liability limits. A young student can perhaps take such risks due to lack of money and worldly possessions. However, it makes sense to increase liability limits as your possessions grow.
It doesn’t matter how many components they have. It has no relevance to its status. You can have just the liability. Anything else you add on is optional even though large numbers of motorists choose to have Collision and Comprehensive as well.
In addition, standard vehicle insurance coverage refers to the way it protects you and the automobile. For example, a typical liability provides coverage if the policyholder drives someone else’s automobile even though it is usually secondary to the owner’s.
Also, it includes occasional drivers who use your car with your permission. There are some nonstandard auto policies that limit who is allowed to use the vehicle. Sometimes, even traditional companies may restrict occasional operators to people over the age of 21 or 25 to avoid teenager, especially when it is a high performance automobile. However, some high risk carriers can provide named driver insurance that only includes the names on the schedule.
So, typical policies provide coverage widely accepted within the industry and nonstandard can have restrictions and special conditions. Usually, most people don’t look for them. You may be forced to buy it if you are struggling to find affordable prices through mainstream carriers.
Typical Drivers with Average Car Insurance Rates
Underwriters normally set three different rates for three groups of drivers. These are preferred risk for the best, standard for average and high rates for drivers with various problems that keep them apart from the rest due to higher or different risk profiles.
As a general rule, most people over the age of 25 with several years of experience and history can get commonly sold policies even if they have one or two small claims or traffic tickets.
As it is probably already clear, qualifying for the regular rates doesn’t really say much in terms of costs, even though failing to qualify for them can mean paying higher. The answer is in the details if you want to know how much is auto premium for you? A lot depends on personal details like credit history, home ownership and zip code along with records. For example, you may be charged a bit more than the usual if you have a bad credit score or a recent lapse.
On the other hand, most companies offer substantial discounts on their usual rates to people with good history and credit scores. The logic of premium calculations is to reward motorists who are careful and discourage risk taking and making claims.
The term must be taken loosely as even these policies can vary depending on the provider and state. Another point to consider is the interpretation and application of these terms. The bottom line is that you should look for top companies who are known for paying claims without a fuss.