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Getting Car Insurance: Exploring the Kit and Caboodle
While certain forms of car insurance are legally required before you turn on the engine in your car, you will find several non-essential forms of coverage that can be mind-boggling and expensive. But depending on your needs and budget, you can tailor your car insurance for maximum protection.
Car insurance is a necessary expense that protects your assets from lawsuits in case of a car accident besides helping you pay for injuries, damages or unfortunate death related expenses.
Given you can be sued, irrespective of fault demands that you understand the various forms of insurance, which are available to you. Some of the common forms of coverage are:
Bodily injury liability: This is legally required in most states, and covers the passengers and drivers of the other car involved in the accident, as well as the passengers in your own car. The amount of coverage you seek depends on the assets you own. In other words, the higher your net worth, the higher the coverage amount.
Personal injury protection (PIP): As the name indicates, PIP is meant to cover you own medical and funeral costs, irrespective of fault.
Collision and comprehensive coverage: This covers the total cost of repairing or replacing you vehicle in case of an accident, theft, or vandalism. This is especially essential if you have a new car or an expensive car. You can check the value of your car from NADAguides, and decide if you require this form of coverage.
Property damage liability (PDL): While PDL is not mandatory in all states; it makes financial sense to get this coverage since it helps pay for any damage caused by you to another person’s car or property.
Uninsured or underinsured motorist protection: With the economy in the doldrums, an increasing number of people are letting their car insurance payments slide or are cutting down the cost to the bones. If you can afford it, this is an important form of coverage that pays for medical and funeral expenses incurred and not covered by the other driver’s insurance policy.
Lowering Your Car Insurance Bill
According to CNNMoney, car insurance companies see you, the driver, as a statistic, and a bundle of possible risks. So they will try to safeguard their profit margins by maximizing your coverage.
While car insurance companies factor in non-driving markers such as age of the driver, their occupation, and location, among others to determine your premium, you can help your cause by being a safe driver. Additionally, there are means available to you that can whittle down your car insurance bill.
Do your research. You must shop around and get a variety of competitive quotes. You will be surprised at the difference in prices for the very same coverage.
Multi-policy insurance. If you insure more than one vehicle with your car insurance company, you are likely to get a reasonable discount. Add on your home insurance and you might have a decent pile of savings.
Bundles of discounts. Car insurance companies offer a plethora of discounts, from the well-advertised good driver and good student rewards to safe vehicle and low mileage discounts. If you are in a rural area, you might be eligible for lower rates. Senior citizens and members of auto clubs also receive discounts. Certain professionals such as doctors and engineers, among others have historically proven to be better drivers and get cheaper rates. So do your research and if you choose to get your insurance online, you might be eligible for an Internet discount!
Raise your deductible. The higher the deductible or the amount that you have to pay in case of an accident, before the insurance kicks, the lower your monthly premium.
Get the right car. Some cars with higher theft rates, higher accident rates, and higher repair costs are more expensive to insure. So if you are buying a new car, make sure you understand the different rates associated with each car you consider.
Trim your coverage. You might not need as much coverage as you have. For instance, if you signed up for collision and comprehensive coverage, which can be as high as 40% of your premium, when you purchased a new car a few years ago, you might no longer need it given the depreciation of car values.
Little Known Tip for Lowering Your Car Insurance
Few people know that their credit rating can have a huge impact on who is willing to insure them and how much they have to pay. In fact, a poor credit rating can push up your insurance bill by up to 40%.
This is because car insurance companies focus on the ability of the person to make monthly payments and a poor score indicates an inability to make timely bill payments.
So it is prudent to focus on your credit score. If you have low credit scores, try to pay off your debt as quickly as possible, and see your FICO scores rise, while your insurance bill drops.
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