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Auto Insurance Facts You Should Know

Everyone wants a personal safe ride whenever they go out for a trip or even traveling near destinations. People are also after on the security of protecting their investment and physical health when an accident happens. Because of this, car insurance became a popular industry in the country. In fact, auto insurance became a necessity nowadays when you own a car. Having car insurance is a requirement for most states in the USA. This is already by law and it depicts the benefits it could provide to the policyholders.

Car insurance could indeed provide this security financially when we have to deal with damages due to an accident. But even there are many already people who have this, a lot of things are still not known by policyholders or by other people who are in a search about auto collision coverage premium. To help you with this, here are auto insurance facts you should know.

1. Factors In Determining Auto Insurance Rates

Below are different factors that are being used by insurance companies to determine the cost of your auto insurance.  

Age

Age in correlation with the years of driving experience affects the cost of car insurance. Younger drivers tend to have less experience which makes them more prone or have a higher risk to be involved in an accident. In between the ages of 25 to 30, auto insurance premiums became cheaper and usually became more expensive again for people within the age range of 60 and above.

Records of Driving

Accident involvement and traffic violations are some of the biggest contributing factors. People who have bad records will have to pay more expensive car insurance premiums.

Location

The policyholder’s location affects the cost of the premium. If the area of the policyholder is known for numerous accident cases and frequent insurance claims, the cost of car insurance is more expensive. The crime rate in the area is a factor as well that makes insurance costs higher than in other areas.

Car Model

Insurance companies are considering the year, model, and make of your car.  The specification of the car is a factor as well since there are car features that are expensive to repair or replace.

2. Car Insurance Companies Are After The Car, Not The Driver

Regardless of who drives the car, standard auto insurance policies follow it. It means that your insurance will still provide coverage for any damages to the car even you are not the driver. There are states that it is not required to have this kind of policy. People may choose the named driver policy which follows after the driver, not the car. This is the type of auto insurance that could only be extended to people who live in the same household as the policyholder. It also includes people that may be listed on the coverage. If you lend your car to someone who is not indicated in the list his or her insurance will be used in case of an accident and claiming damages.

3. What Are The Different Types Of Car Insurance Policy?

Medical Payments Coverage

Medical Payment Coverage is the insurance premium that will be beneficial to cover medical expenses due to an accident even you or the other party is at fault.

Uninsured Motorist Insurance

This covers the damages caused by people who don’t have insurance or accidents which the responsible person is unknown. An example of this case is hit-and-run.

Collision Coverage

If the policyholder is involved in an accident with another vehicle, the collision coverage assists in repairing or replacing your damaged car.

Comprehensive Policy

Comprehensive Policy provides more coverage in an event of an accident that involves another vehicle. Aside from car collisions, it covers vandalism, damages due to weather conditions, and accidents that involve animals.

Liability Coverage

This type of auto insurance is required in driving a car in most states in the country. In a case of an accident, it covers injuries and property damages for which the policyholder is responsible.

Rental Reimbursement Insurance

If the policyholder has to rent a car as a temporary substitute for the vehicle that has been damaged in an accident, the rental fees or expenses could be reimbursed. Rental Reimbursement Insurance covers the rental expenses for the insured car owner.

Underinsured Motorist Insurance

This type of premium is beneficial in an event that the other party’s insurance policy is not enough to cover the damages of the accident. Some policyholders choose minimum coverage of insurance to make it cheaper but only have limited coverage.

Personal Injury Protection Insurance

It provides wider coverage in dealing with medical expenses and the financial income loss due to an accident. It could include up to 80% of the medical expenses and other damages.

Classic Car Insurance

This insurance policy covers protection for classic and vintage cars. Car collectors and vintage enthusiasts are the people who benefit from this insurance coverage.

Gap Insurance

Cars’ value depreciates very fast as time goes by. This makes the cost of the settlement not be enough to cover all damages. If the car was purchased through a loan, Gap Insurance covers the amount owed by the policyholder if the vehicle is stolen, a totaled car or a total loss.

Towing And Labor Insurance

This insurance coverage could reimburse the cost of tow services and repair services of the car. This is available when the policyholder has a comprehensive coverage premium.

Comprehensive Policy

Comprehensive Policy provides more coverage in an event of an accident that involves another vehicle. Aside from car collisions, it covers vandalism, damages due to weather conditions, and accidents that involve animals.

4. Insurance When You Are Not At-Fault

Law requires the policyholder of No-Fault insurance to have car insurance that could cover the medical expenses and income loss due to an accident.  Even the policyholder is at fault or not in the accident, this will help cover damages.

5. Most of US States Requires Car Insurance

If you are planning to buy a car, you are required to have car insurance first before owning and driving it. This requirement is implemented in 49 out of 50 states in the country. Search car insurance things to know in your state law regarding this to avoid violations.

6. Car Insurance Discounts

Available discounts are being offered in availing of car insurance. Make sure to be aware of these options and select car insurance premiums that could offer the best for you.

  1. Transfer discount
  2. Payment frequency discount
  3. Multi-car discount
  4. Homeowners insurance discount
  5. Anti-theft discount
  6. Defensive driving discount
  7. Advanced quote discount

7. Saving Money by Paying in Full

There are additional charges when you are paying your premiums on an installment basis. The longer-term you have, the higher costs could be added to your expenses in paying your insurance. You could save money if you pay it in full and avoid additional unwanted fees.

8. Mileage of the Car Affects Insurance Cost

The higher mileage your car has, the more expensive car insurance premium you will get. This is due to the wear and tear the car has had over the year. A new car will make your auto insurance cheaper.

red car accident

9. You Have Not To Pay More For Red Cars

Red cars having a higher cost of insurance premium is not true. Car insurance costs are not connected to the color of the vehicle. As long as you drive safely, car color is not a factor in the number of accidents and the cost of your insurance.

10. Auto Insurance Coverage Can Be Canceled

Upon violating any terms in your policy, your premium could be canceled by the insurance company at any time. There are other factors such as payment delays, revocation or suspension of driver’s license, and many at-fault claims. These could cause the cancellation or nonrenewal of your car insurance.

11. Parking and Maneuvering are Major Causes of Car Damages

Driver’s lack of skills and reckless in parking and maneuvering are simple causes of most accident car damages. This resulted in 40% of auto damages, 70% liability claims, and 85% full damage claims. These are big numbers that could be resolved by being defensive and not reckless in driving.

12. $1,470 is the Average Cost of Auto Insurance Full Coverage

If you are residing in the expensive side of the country, a full coverage car insurance could cost $1,470 up to $2,700. This will differ in your state and change annually.

13. In the USA, There are 770,000 Stolen Cars Every Year

This is a good reason why you should take a car insurance premium that covers the cost of a stolen car. With the recorded crimes happening around, protect your investment by ensuring that it is parked in a safe place. Don’t leave any valuable inside the car and make sure that all door locks are working. Car insurance that covers the full cost of the car when stolen will be beneficial to secure your investment.

You are entitled to claims if you have experienced injuries in a car accident. Freeway Law’s Personal Injury Attorneys in Orange County could help you throughout the complex process of dealing with insurance companies and claiming damages. Have a free consultation with our top-notched team by calling us at (844) 443-7339.

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