Vehicle Insurance Basics

What Exactly is Automobile Insurance

Car insurance is designed to provide protection to you in the event you injure others, including property damages and bodily injury, as a result of an accident. Furthermore, depending on the coverage and plan you have, it will provide reimbursement to you for injuries and damage done to your vehicle. In its most basic form, car insurance is a contract, made between you and your carrier. You agree to pay a set price, referred to as premiums, in exchange for selected coverages.

The type of policy you have is written out in detail in the declaration page, so make sure you always read it and understand the exact coverage you have. It’s always smart to go through your policy thoroughly and make sure you don’t have any overlapping items, such as rental insurance. This is often covered on your credit card agreement, so you might just be wasting money having it. Remember, you can always upgrade your insurance and cancel it anytime.

What does automobile insurance cover?

This is a common question new customers always ask agents. The answer is, it depends on the plan and policy type you buy.

There are four main categories of protection.

* Liability Insurance

This covers injuries to the other party, damage to their vehicle and also property damages. If you have a vehicle not worth very much and you don’t drive too often, liability only insurance may make sense. It is much cheaper than comprehensive, with pricing in some states starting at $29 for good drivers.

* Collision Insurance

This will pay for damage and medical costs pertaining to you. It’s smart to buy it if your vehicle is newer and worth more than $12,000.

* Comprehensive Insurance

This is the gold standard of coverage. This type of policy costs more but has wide ranging protection. It coincides with collision and will repair of replace your automobile for events that cause damage or a loss, not relating to an vehicular accident. This means if your car is stolen, you will be protected and can get it replaced for its current market value. Also, weather related damages done to your auto will also be covered. Typical examples are flooding, fires and animal incidents.

* Uninsured Motorists Insurance

There are more people driving on the roads uninsured than ever before. Buying uninsured motorists insurance will protect you from these lawless drivers. If you get involved in an accident with someone with no insurance, you will insured up to your policy limits.

It is important to know that every state has different insurance mandatory coverage and laws. You should familiarize yourself with the mandated limits in your state and stay current with changing laws.

The Most Common Car Insurance Coverages

Each type of coverage you purchase contains a set of limits, policy terms and multiple conditions. Bodily injury is an all important one.

It will pay for, as the name implies, bodily injuries sustained from an incident you were found to be at fault causing. A good liability policy will also pay for legal fees, up to certain predefined limits, in the event you are sued in court.

Liability will also pay for damages you caused to another persons property, almost always their automobile, after an at-fault accident occurred. Medical insurance will most often cover you and the passengers riding along in your vehicle who were hurt in a crash. Another advantage of having good medical coverage is, it will cover medical costs in the event you are hit by a car walking as a pedestrian.

There are several states that have PIP or personal injury protection laws as opposed to medical coverage. Some people refer to this as no-fault coverage. PIP insurance will most often pay for medical, funeral, income loss and a variety of other costs that relate to bodily injuries sustained after a vehicle accident.

What you Need to Know Before Buying Car Insurance

The most important thing to think about when buying auto insurance is getting coverage that meets your needs. What are your specific needs, including your budget and tolerance of risk. Remember, you should think of a worse case scenario, such as buying enough coverage to replace your car and protecting the assets you have accumulated.

In general, the higher your personal net worth, the more insurance protection you will need. Lawyers also target people who have large amounts of money with vigorous lawsuits, claiming pain and suffering damages. Your insurance plan should follow your asset growth and protect you to the fullest.

PIP Auto Insurance

Maybe you have also heard the term PIP auto insurance, and it sent you wondering, what’s that now? Here is some light of what PIP auto insurance is all about; PIP (Personal Injury Protection) auto insurance is a type of vehicle coverage. It is added insurance cover that will clear some of your hospital bills after a genuine car accident. It will also pay for some others non-incident related charges.

PIP has so many benefits, and the most obvious one is that PIP auto insurance compensates for lost wages resulting from any serious injuries that the insured suffers. Secondly, a PIP claim will be active regardless of who was responsible for the accident; this is what insurance experts refer to as “no fault” protection.

You can get your “PIP” insurance cover for your car online within 5 minutes. You can also do shop to shop comparisons from up to 10 national carriers and then select the plan that seems to work best for you.


Medical costs are high, and they are rising year after year, maybe you have not considered that fact. There are various aspects in a motor car accident, and one of the most expensive ones may be catering for medical bills. Such medical expenses include ambulance, physical therapy, medicine and other expenses. Many insurance companies will offer policies that do not cover any amount of heath care. Those policies that cover medical bills are much more expensive.

If you have PIP insurance added to your policy, all these expenses will be catered for. Some policies will go ahead and cover upkeep expenses to your home like cleaning and yard care. However, adding PIP to your policy is expensive but considering the possibility of the unfortunate occurrence where you find yourself in a fatal crash, getting it is definitely a wise decision. You can get quoted now and find cheaper insurance cover in your area.

States that Mandate PIP Insurance

Some states have mandated PIP Insurance and to date, they are 13 of them. They are Florida, Utah, North Dakota, Hawaii, Kansas, Massachusetts, New Jersey, Pennsylvania, Minnesota, Michigan, Massachusetts and the Washington D.C. More states are expected shortly to pass and enforce this type of mandatory regulation. This results from the fact that heath care expenses are rising at a high rate. Some states with a big population like California and Texas have PIP insurance covers to protect the lives of drivers.

PIP Plans are Unique to each State

Each and every state is responsible for crafting their insurance laws and regulations. Insurers operating in a certain state have the leniency to offer coverage within the guidelines in that state. With PIP protection, many states have different degrees of acceptable procedures that are covered.

Example, massage therapy may be fine in Florida but not in Minnesota. You should, therefore, check with your insurance agent if you are confused about what therapy your policy will cover.

One of the great advantages of PIP plans over “Med Pay” and other assurances is it covers both the expenses related to the crash, as well as compensates for lost income There are countless costs non-related to an accident that many people never even think about until such an event happens. PIP plans are more comprehensive in nature and provide a wider array of benefits

Less Legal Issues In the recent past couple of decades, there has been high numbers of cases in courts relating to personal injury resulting from a vehicle accident. This has prompted most states to pass the “no fault” initiatives and make the PIP insurance mandatory. This helps to keep the cases at the minimum.

Under 25 and Buying Your First Car?

Being able to go where you want, when you want is something most young people dream of.

However, there is no denying that buying and insuring your first car if you are under 25 and a newly-qualified driver can be expensive.

We have some tips to help you to get the most for your most of your money.

The amount of insurance a driver pays is not only affected by their age and length of driving experience.

The make, model, performance level (engine size) and age of a car are all factors the insurers use to assess the annual premium. This is because all insurance is based on risk, in this case the likelihood that the insurer will have to pay out for a claim if you have an accident or your car is stolen.

The cost of repairs and replacement parts is also including in the risk factors.

Insurers refer to a ranking list calculated by a body called the Group Rating Panel, made up of representatives of the insurance industry, the Association of British Insurers (ABI) and Lloyds Market Association.

The panel uses all this data to place cars into one of 50 groups with Group 1 being the lowest and cheapest ranking and 50 being the highest. Insurers then use this information to quote you a price for insuring your vehicle.

The cheapest ones to insure will therefore be those that tend to be less expensive, low-specification models with smaller engines.

If you then add into this calculation your age and inexperience as a driver, it’s easy to see that a luxury, high performance car is going to be well beyond affordability for most young people.

When looking for a car to buy, therefore, any of the mainstream makes, such as Ford, Renault, Vauxhall or Honda with an engine size below 1.3 is likely to be the cheapest to unsure.

There are other things young people can do to bring down the cost of their car insurance. These include adding security immobilisers and alarms, but make sure they are ones approved by the insurer.

You can also take the Pass Plus qualification after you have passed your test and some insurers will also offer what is called Black Box Insurance. This involves having a “black box” monitor fitted to your vehicle, which tracks and records your driving behaviour, such as acceleration, speed, braking and the times of day when you drive. The information is used to reward careful drivers by reducing their insurance costs.

We Have Seen the Future of Gap Insurance and It Is Not “As Phoenix Night Star Said, Garlic Bread”

Peter Kay the star of Phoenix nights is not only well-known for his comic antics and charitable work but also for coining the phrase “I have seen the future and it is garlic bread.”

I cannot compete with Peter’s impeccable comic timing but I can try to glimpse into the future of my industry. So what is the future of gap insurance and what can we expect from our gap insurance policies in the future.

The Financial Conduct Authority has made no secret of wanting to take steps to make sure that consumers and policy holders get a faint deal. My interpretation of fair is not only price but also policy performance.

So how can gap insurance providers and insurance underwriters make sure that this happens. After all for a policy to be genuinely fair it has to work for everyone. That means that the insurance has to have terms and conditions that are easy to understand. That the policy must do exactly what both the insurance underwriters and policy holders expect it to do when and if a claim is made.

So what can we as gap insurance providers do to make sure that this happens while not leaving the policy open to abuse. We think that an important and prudent step is to remove any grey areas. Remove any question of doubt. Eliminate any potential area where both the policy and the insurance provider can be left exposed.

We have for some time be working towards this with policy which are now much more customer focused. The biggest stumbling block we found and a constant question for debate has always been which level of cover is best and in fact how much cover is enough without being over insured.

Standard practise means that to cover any vehicle the gap insurance provider must use historical rates of depreciation to predict potential levels. While this “crystal ball ” gazing can be accurate we can never lose sight of the fact that any potential deprecation and subsequent cover is based on a prediction and not a guarantee.

So what if? Global analysts and economist who study the world and global markets can and do make mistakes. So if such highly trained and qualified analysts can make mistakes how can you and I be expected to make accurate choices. Choices which can ultimately make a massive difference to any claim settlement. Choices which could adversely lower any future payment.

We genuinely believe that the real future of gap insurance is a policy where by these choices are simply taken away. A gap insurance policy where by the consumer commits to cover and then the policy simply performance to which ever style of gap insurance is most beneficial on the day of loss.

Combining this hybrid policy with a completely open-ended claim limit will mean that no policy holder can ever be held to ransom by a limit which is no longer fit for purpose.

A policy which will mean that both gap insurance providers and policy holders alike are able protect themselves safe in the knowledge that their policy will have the flexibility to be able to perform no matter what.

New Car Insurance Online Info: How to Get Discounts and Compare Offers for Affordable Insurance

There are a number of things you can do to get cheaper auto insurance. For starters, you can start looking for quotes and comparing them. Just use a site that offers search tools for finding new car insurance online. There are so many auto insurance companies and different types of policies and no two drivers are exactly alike, so you’ll likely have to provide a bit of information regarding your driving history in order to get the most accurate quotes possible.

Even if you already have a car insurance policy, you might want a new one. You’ll definitely need a new one if you are planning to buy a new vehicle. Researching insurance policies will also help you determine what kind of vehicle to buy if you haven’t yet picked one out. This is because the type of vehicle you own will affect the rate.

It’s important to know exactly what kinds of coverage are required in your state. Each state has its own set of laws. Some of the coverage types that typically appear in a vehicle insurance policy include property damage liability, bodily injury liability, collision, personal injury / medical payments protection, comprehensive, under-insured motorist coverage, etc. Some of these types might only be an option in your state, and you may or may not actually need them.

Discounts With New Car Insurance Online

There is the occasional discount available: keep that in mind when you search for new car insurance online. For instance, there are student discounts, good driver discounts, senior discounts, and so forth. You might be able to lower the cost if you take a driver’s defensive course in your area.

Before submitting any sensitive information through any website to obtain quotes, make sure that there are security policies to ensure that any communication through the site is protected from third parties. Set the web browser to send you a notification when you leave that secure session. Once you’ve received quotes, take the time to research each company and compare what they offer. Does the rate justify the types of coverage you will get with a particular policy? What about any additional fees or exclusions? Don’t rush into a decision. Take some time to consider your options. Find out if any provider will allow you to create a more personalized policy, if you need one.

Once you have selected the policy you think is best for you, select the payment method and purchase your new car insurance online. You should always start your search with esurance. It not only offers the best quotes, but the resources you need for conducting your research and making your decision.

Is It Possible That Your Car Insurance Company Had Discounts They Are Not Telling You About?

Learning the ins and outs of general and classic insurance coverage will help you get the right coverage at the right price. A number of factors determine the particular drivers that insurance companies give the best premium rates to.

Before purchasing a new vehicle or a classic vehicle, always research insurance rates. Your insurance agent can inform you which new cars have the lowest insurance rates. Knowing the rates can help you in choosing the car that is best for you. By purchasing a car that has a good safety rating, you can save a lot on your car insurance.

When shopping for vehicle insurance coverage for your teen, ask your agent to give you a quote, both as a separate policy and also as an addition to your existing policy. In some cases, you may want to insure your teenager separately.

Many people believe that auto insurance rates go down automatically for young drivers once they reach 25. However, the truth is that rates slowly decrease from the time a driver turns 18 years old, as long as he or she maintains a clean driving record.

There are insurance plans beyond what is legally required that offer better protection. You are going to have to pay a higher deductible, but it might work out for you in the long run. Using uninsured motorist protection protects you from financial liability if you are the victim of a hit-and-run accident, or if any driver that causes you damage is not carrying insurance.

Don’t do monthly payments for your classic auto insurance bill. Insurance providers add a convenience fee to monthly payments. These extra fees can become significant over time. It can also become a hassle on top of all your other monthly bills. The fewer payments you make, the more money you save.

The best way to keep your insurance down is to avoid tickets and accidents. Getting in an accident will drastically increase your rates. Drive defensively and know your limits. Stay out of situations in which you have a higher chance of an accident. Do not drink and drive and stay home if the weather is bad.

Most people pay a different premium for auto insurance. This is not entirely due to different driving situations and different vehicles, either. Certain people can get the same amount of coverage, if not more, and save money. You can easily do this if you take the time to learn the auto insurance tricks.

You now know that it is possible to find affordable insurance rates with a great company. By actively using the tips described in this article, you can have lower car insurance premiums.

Understanding Why Auto Insurance Premiums Are Very Costly

These days, we’re all complaining about the high cost of living. It appears as if anyone who owns and operates an automobile is hit by a good dose of bills that require struggling with: the cost of purchasing the car, fuel costs, maintenance and repair costs – and the super BIG ONE – auto insurance premiums.

If you haven’t yet verbalized it, no doubt the glaring question is underscored in your mind: Why does car (read car, truck, motorcycle, RV and so on) insurance have to be so very, very expensive?!

The answer to anything related to insurance comes from the industry itself and this is no exception.

“Insurance rates differ from person to person and are based on a few factors,” says a noted specialist working in the Tri-State area and employed by an independent agency. “It all boils down to how much of a risk you as a driver may be.”

Eight Factors that May Affect Your Auto Insurance Bill

Some of the things that determine how much you pay for auto insurance are listed below.

• What Type of Vehicle you Drive

There is a clear difference between makes and models of cars in regard to safety. Moreover, higher-end cars attached to a bigger price tag are more attractive to car thieves and are more expensive to replace; they are also more expensive to fix after an accident.

• Your Address

If you live in a place that has a higher crime rate, your premium will reflect the risk of theft. If you locality has proportionately more auto accidents and submitted claims, it will have an effect on your premium as well.

• How You Use Your Car

If you use your car for the commute to and from the workplace or use it for business purposes, you’ll find that you will have a higher premium than those that drive just to go to the grocer or for leisure trips.

• If You Are a Good Driver

If you never have gotten a driving ticket or never been an accident, you will have a lower insurance rate than those who have a less pristine driving record.

• Your Claims Record

If you have previously filed insurance claims, especially if they have resulted in big payouts, your insurance premium will reflect that. But you may also find a rate increase if you have only filed claims in regard to accidents where you are not at fault.

• How Old You Are

Young drivers, especially boys in the teen years, are grouped together as riskier drivers because the statistics say they display poor driving habits and are involved in and cause many more serious accidents than older drivers. To a lesser degree, those sixty-five and older may find their insurance rates up due to age matters that contribute to poorer reflexes, eyesight issues and more.

• Marriage Status

Studies show that husbands and wives are not involved in as many collisions as those who are not married.

• How Your Credit Rates

Though this may not seem fair to some, insurance companies may class you as a driving risk due to your poor credit score.

Speaking to a knowledgeable specialist employed by an independent insurance agency will help you navigate through the web of insurance policies so that you are presented with the most tailored one at the most competitive price.

Review, Reconsider, Reduce, And More: How to Save on Car Insurance

You may be leaving money on the table if you haven’t examined your car insurance coverage lately. It’s typical for people to overpay for this coverage, especially if you haven’t analyzed your protection and the options available to you. Different factors will combine to determine what you might pay.

Request a Review

If you’ve had a clean driving record for some time and haven’t had any accidents or traffic citations, you might be eligible for a premium reduction based on your exemplary record. Similarly, people with good credit ratings often receive lower premium quotes because better credit ratings indicate a higher level of responsibility. Ask your agent to review your account to see if you are eligible for a rate reduction based on your driving record or your credit score.

Reconsider Your Deductible

If your current deductible is low, you can protect yourself from out-of-pocket expenses. However, you might decide that you’re willing to run the risk of some expenses in exchange for a lower premium. While this can be risky, if you and everyone covered on your policy are experienced and safe drivers with solid driving histories, this can be an effective way to reduce your expenses because of the lower likelihood that you will be involved in accidents.

Reduce Your Driving

Many companies track customers’ mileage and base premiums on the number of miles people drive. If you can reduce the number of miles you drive, your car insurance premiums may fall. Carpooling can be one effective way to reduce the number of miles you drive. You may also lower your mileage by using public transportation and other forms of transportation such as biking or walking. Sometimes just combining errands and monitoring how you use your vehicles can lower your driving mileage.

Eliminate Forms of Coverage

With a late model vehicle, you will need collision coverage to protect you from loss in connection with an auto accident. Collision coverage will also pay you the value of your automobile if it is a total loss. As a vehicle ages, it depreciates in value. For this reason, this protection may not be worth the expense because the amount paid to you by the company would be nominal due to the reduced value. Comprehensive coverage is protection against loss from incidents unrelated to accidents, such as weather damage. Consider dropping collision and/or comprehensive coverage to reduce your premiums, as long as you are willing to pay for any damage yourself.

Additional Policies

Many companies offer different types of policies to protect customers from loss in a variety of areas, such as renter’s, homeowner’s, and health insurance. If you need additional coverage for other areas of your life, consider bundling all of your insurance policies from one company. Customers who practice this bundling often receive extra volume discounts, which can save significant money.

Car insurance is a necessary expense, but don’t pay more than you need to pay to protect yourself from loss. A little effort might enable you to save money.

When It’s Time for a Senior to Give Up Driving

An Auto Insurance Special Topic

Anyone will find it very hard to implement change.

Though sticking through a diet plan, an exercise regimen or educational program, successfully doing so results in positive changes a person feels good about. When it comes to an older driver having to give up driving, the loss of associated independence is painful – and very much so.

Nonetheless, telling a senior to stop driving may be a necessary evil at some point or other.

Once an older driver begins to show a decline in physical or mental abilities that include poor eyesight, loss of hearing, slower reflexes, arthritis, diabetes – and certainly Parkinson’s Disease, and dementia – he or she is prone to become a danger on the road. Moreover, dependence on certain medications, like anti-anxiety medicine, narcotics and sleeping pills make for a sure-risk to the driver, other drivers and passengers as well as pedestrians.

To underscore the safety concerns of the older driver, insurance sources say auto crash fatalities increase with those over the age of 70.

Take a look at some of the warning signs that may indicate it’s no longer a good idea to be the navigator behind the wheel of a car:

• Tendency to become distracted

• slow to react

• difficulty staying within lines of the lane

• difficulty switching to proper traffic lane

• hitting curbs

• scratching or denting the car or banging into the garage or curbside mailbox

• Side sweeping other vehicles

• Driving excessively fast or slow

• Not stopping on a red light or by a stop sign

• Stopping at a green light or when there is not a stop sign

• Tendency to get lost

Because it is such a touchy subject and a change that will have such an impact on your loved one’s life, telling a senior driver to give up driving is something to plan for before discussing it.

Prepare a list of things you or others have observed that are telltale signs it’s time to leave the driving to others.

Arrange for alternate ways of transportation that your loved one can rely on after he or she no longer drives: relatives, friends, volunteers from a senior facility, public bus or train services, car services and so on.

Think of ways your senior can fill the gap in life that he or she will feel once the keys are not at disposal.

Above all, keep sensitivity in mind at all times. Be kind and compassionate while showing your loved one you support and respect him or her and understand how hard a life-change of such proportion can be.

Cheap Auto Insurance Policy With the Good Ones

There are many things to think about when buying automobile insurance other than price alone. You need to carefully consider all the insurance coverage options, which will play a large role in the cost of your premiums.

It may sound a bit confusing, but getting the cheapest policy may, in reality, cost you serious money down the road. Why you might ask? Getting the state minimum coverage may leave you naked so to speak. In the event you get into an automobile collision, the amount of coverage you need to cover the accident might be considerably more than your policy limits.

Even worse, you could get sued and have your wages garnished. If you hurt another person in an accident you caused and could not pay for all their medical bills, you likely will.

Get the best Car Insurance for Your Needs

Let’s stick with the cheapest type of insurance plan, basic liability insurance. If you get the state minimums, you can get monthly rates as low as $30. The problem is, your car could be worth $15,000 or more. If you get into a collision, guess what, your plan would not pay for repairs to your vehicle. If it is completely totaled, that means you have just lost $15K, which is a lot of money.

Now that low-cost liability policy just cost you thousands. Simple public liability and property damage should only be used under certain circumstances. For example, if you have a vehicle that is worth less than $3,000 and you do not drive it much, maybe you can take this risk. Also, if you are a college student with an old ride not worth much, you can take the risk and stay within your budget. However, if you have an expensive car and assets to protect, you are going to need to buy added protection.

The other thing to consider with these cheaper policies is legal liability. The United States is a very litigious country. There are literally tens of thousands of injury attorneys looking for new cases. This means if you get into a vehicular incident that you were deemed to be responsible for, a limited policy can come back to bite you. Let’s say you only have protection of $50,000 in medical damages. You check your cell phone while driving, run a red light and T-bone a nice lady in a used Honda. She goes to the hospital for two weeks and racks up $250,000 in hospital expenses.

Her lawyer will immediately sue you for the balance of these costs, which in this example is $200,000. You can go to court and fight this, but it will cost you thousands to hire an attorney. The judge in this example might award the victim the $200,000 plus legal fees, which would more than likely devastate you. There might be a payment schedule of $2,000 a month taken out of your paycheck for ten years. So your money saving $39 a month policy in the long run just cost you a fortune.

The most important thing to think about when you buy auto ins is the protection of your assets. If you make more than $60,000 per year, get a policy that has up to $500,000 in accident coverage. In the event you do get into a serious collision, you will be properly covered and not get financially crushed. You might pay $130 per month and even more for a higher limit plan, but in the long run, it is the smart move to make.

You can take advantage of good driver or senior citizen discounts and save 5% or more. Another great tip is to raise your deductible up to $1,000 or higher. This way you can buy an enhanced ins plan at a lower rate. Just remember to set aside the $1k in the unfortunate event you get into a crash and need to file a quick claim.

Buy Auto Insurance Direct and Save Big

Now that you have selected the type of insurance you want, it is time to shop around for the best rates.