It Is Quite Foolish to Purchase a Car Without Considering the Insurance That Comes With It
1 – Full Coverage Includes Towing and Rental
Full coverage is not a specific type of coverage, but it refers to a bundled option where multiple types of coverage are included. It can be interpreted in different ways, but most companies use the term to refer to minimum liability requirements by the state. It is worth mentioning that the minimum requirements can be different from state to state, so “full coverage” does not necessarily mean “everything is covered” including towing and rental reimbursement. Both of them are simply extras or optional coverage similar to uninsured motorist, vanishing deductible, glass damage, etc. Any optional coverage carries an additional cost.
2 – Driving Record Plays the Biggest Role when Determining Rates
While it is true that driving history has its part as a variable in determining premium fee, this is not necessarily the most important one. There are other factors involved in the calculation such as personal information (this may include age, address, profession, marital status, etc.), mileage, and car models. If you are a student, your grades are also important variables, meaning good grades can reduce premium fee. You should know that credit score is also involved. Good credit score means cheaper premium since the company needs to make sure that you have good financial stability.
3 – Comprehensive Covers Everything that Collision Does Not
In general, comprehensive coverage is for any damage that is not caused by an accident. There are plenty of possibilities and causes of auto damage. If the damages caused by an accident are covered by Collision, some people think that all other causes of damages are covered by Comprehensive. This is totally wrong, since insurer clearly informs what comprehensive coverage covers including vandalism; natural disasters (flood, earthquake, etc.), fire, theft, and hail. So when your car’s gearbox or manifold is broken, you have to pay for the repair yourself.
4 – Driving Safely Certainly Lowers Premium Fee
Good drivers are treated nicely, and there is a big possibility that the firm lowers your rate. If you receive traffic tickets or you are involved in an accident, the insurance firm can ask for the data from DMV. Depending on the types of violation, insurer can easily increase your rate or simply cancel your policy. It is indeed good to drive safe and obey the traffic regulation, but you cannot expect that your premium rates are lowered accordingly. Moreover, you cannot blame the company in case your rate remains the same anyway. Once again, there are other variables involved such as increasing the cost of repair, more lawsuits, and even regional insurance rate trends. It should not, however, discourage you to stay safe on the road; if driving safe cannot lower the rate, at least it does help prevent the company from increasing the premium fee.
5 – Newer Cars Mean More Expensive Insurance
Newer does not always mean better or more expensive to purchase and insure. Every auto comes out of the factories with its specification regarding speed, reliability, safety features, luxurious equipment, etc. Some people also install additional upgrades on their car, for example audio system, satellite navigation, airbags, anti-theft, and more. In some cases, buying used-car and insuring it can be very expensive, especially if it is a sport car, classic car, or any luxurious model. Newer cars can be smaller, easier to drive, safer, or fuel efficient; they are good features to help you reduce the premium rate.
6 – Smaller Cars Mean Cheaper Insurance
Modern autos that are designed to be fuel-efficient, environment-friendly, and used in metropolitan area for space-saving, are usually small. All those features help lower insurance rate, but the insurer also considers the auto prone to “being totaled” in an accident or collision. If the small car is also a sophisticated one, the premium can be very high or even more expensive that bigger cars are.
7 – Purchasing Online is The best
Buying insurance on the internet is convenient at its best. If you are purchasing online, you are doing it mostly because you can do everything right at your home. You can ask for quotes free of charge, do a diligent comparison, and take your time before finally making a purchase; all of them are done without you having to move from your chair. All it needs is a computer and Internet connection. When it comes to auto insurance, the best deal you can get is when you work with an independent agent, who understands everything better. Independent agent works for you and does all the necessary procedures on your behalf. Even better, the agent can describe everything in details directly face to face with you. There are more data and information that you can get from talking with an agent than doing an online research on your own. You will need to know all discounts offered by certain company and how to be eligible, how to bundle auto and home and pay a lower rate, and all your legal rights after you finally make a purchase. They are all important issues, but often overlooked when buying online.
8 – No-fault Insurance Is Only For Those Who Are Not At-fault
Some states have no-fault insurance regulation. It does not mean that the insurer will pay for damages, medical bill, and every cost related to an accident only for the driver who is not at-fault. It means that the auto insurer will pay for accident-related damages regardless who is at fault in an accident.
9 – Totaled Means Total Damage
Most people think they can tell whether their cars are totaled after an accident, but they are wrong. Every company has its own method to determine the case; basically, a vehicle is considered totaled when the cost of repair for the existing damage exceeds the actual value of the car itself. Depending on the company, the actual value of the vehicle is between 50 to 70 percent of the purchase cost when it was new.
10 – Totaled Car Means Paid Loan As Well
If you finance your automobile, you pay for the loan you owe and the rate, too. In case the vehicle is totaled in an accident, the insurance company will not pay off the price of that car. You still have to pay the remaining loan to the lending institution. You can cover the gap between the car’s actual value and purchase price by using gap insurance; it covers the depreciation. A good agent usually offers this kind of coverage when the customer purchased the car on extended loans, for example 5 years or more. It is critically important to some people, but it can be a simple waste of money for others. Make sure you understand what gap insurance is before buying.
11 – Once the Car Is Insured, Vandalism and Theft Are Covered
It is a basic misconception that people consider insurance covers many things including theft and vandalism. As previously mentioned, full coverage does not include extra or optional coverage, for example Comprehensive. You need to purchase Comprehensive coverage to help the company pay for your financial loss in case the automobile is vandalized or stolen.
12 – New Cars Are Most Targeted By Thieves
Everybody likes a new car, and that is why they think thieves have the same perspective. Thieves have different point of view; they do not steal the cars and drive them as everyday vehicles. They need to make money out of the stolen merchandise as soon as possible. This leads them to prefer older cars because the car-parts are easier to sell and probably more expensive too. Furthermore, in certain places where the economy is not very friendly to the people, used cars sell like hot cakes. Let us not forget that older cars are usually easier to steal as well; they have old security system, and there is a big chance thieves already know the dirty trick to unlock the old cars’ doors and start the engine without a key. Newer and more modern autos with sophisticated anti-theft systems are of course more difficult to steal.
Insurance Company Pays for Your Missing Laptop
If your automobile is stolen or involved in an accident and you find that your items such as mobile phone, CD’s, or laptop are damaged or missing, your auto insurer will not pay for your loss. Companies cover the vehicle, medical bills in case the drivers and passengers are injured, and the damages you cause to other cars. All your items stored in the vehicle are not covered, but you can file claims to home insurance company.
Sports Car Owners Pay Higher Premium. This can be true if the variable used for determining the rate is only auto model. Sports car is designed to be fast, so auto insurance considers this a high-risk vehicle. This model is also usually more expensive due to its high-performance engine and good-looking. Please put in mind that some sports auto owners do not like speeding. It makes them quite safe from traffic tickets; thus, they have clean driving record. Some performance cars are equipped with plenty of safety systems including anti-lock brakes, 5-point harness seatbelt, better traction control, cruise control, and more. Sports car is indeed capable of going very fast, but the safety features make it eligible for some discounts.