The Automobile Insurance Blog

Car Insurance : What You Should Know 2

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Paying a bit more in this time of crisis may be a pain in the pocket now, but just think of the rising numbers of uninsured or under insured drivers these days. What if you were on a collision course with one? You will thank your lucky stars that you prepared for this eventuality. Know the factors that affect your car insurance rate. Companies have various parameters that they use when scrutinizing your application during underwriting. Your claims history is very important when deciding how much premium you should pay. If you have been in too many accidents in the last 3 to 5 years, chances are, you will have a higher premium than someone who has not or the insurance company will think twice before offering you a policy. Another factor insurance companies consider is your credit history, to determine whether or not you are a good credit risk. You don’t think that any insurance company will enjoy doing follow up collection calls just so you could pay your monthly premium, do you?

Don’t be a Victim Of Car Insurance Scams!

Insurance fraud is one of the oldest scams in history. For car insurance fraud, not only is it costly, it’s also dangerous because it may cost you and your family your lives. To avoid being an unwitting victim, you should educate yourself with the different types of insurance scam used. Here are a couple:

• Staged rear-end car accidents is when a scam driver gets in front of an innocent car and then slam on their brakes. The innocent driver will rear-end the scam driver, and the scam driver will get to collect money for vehicle damages. Some scammers also fake medical injuries to collect more.
• After an accident, either staged or not, the scam driver will go to another location and cause extensive damage to their vehicle and claim that the damage happened during the original accident.
If an accident does happen, take notes on everything about the other car, the accident, and everybody that was in the other car. Keep a disposable camera in your car to record damage to both vehicles. And when you talk to your insurance company, let them know if you felt something was suspicious.

Definition of Terms

We feel that just because we have automobile insurance we are already protected from all eventualities. The truth is because we fall into a false sense of security, we do not take the time to find out the details or understand what is actually covered by the policy that we paid for.

Here are common definitions of automobile insurance terms to help you understand just what you are paying for:
1.Bodily Injury Liability � this is for injury sustained by another person caused by the driver of the vehicle.
2.Property Damage Liability � primarily covers damage to other cars or property caused by the driver of the vehicle.
3.Uninsured Motorist � covers involvement in a hit-and-run or an uninsured driver hit your vehicle and caused damage to it.
4.Medical Payments (Personal Injury Protection) � PIP covers medical expenses of the policyholder or the driver of the insured car in case a different person. The coverage also includes passengers and other persons involved in the accident.
5.Collision � pertains to the damage sustained by your vehicle in the accident. The policyholder has a deductible share.
6.Comprehensive � covers your vehicle against eventualities not covered by Collision and provides insurance against theft.

What is Automobile Insurance?

Automobile insurance as with any type of insurance is a contract, called a policy, between the insurance company and the automobile owner that provides financial security to the owner in case of accidents or unforeseen natural events. The policy is executed with the understanding that in exchange for a regular payment, called premium, to the insurance company, they will provide coverage for liabilities of the automobile owner in case he is involved in an accident.

Automobile is usually required especially for new vehicles prior to registration with the appropriate government agency. Every country has a minimum automobile insurance coverage requirement that the owner of the vehicle has to purchase from a private insurance company before his vehicle is considered road worthy.

Car repair and car insurance

One of the things that your car insurer may tell you is that your car needs to be repaired and that you must repair it to the insurer’s recommended shop. While at first you might think that there is nothing wrong with this, since ‘the insurer said so, that’s why it must be good for my insurance,’ well think again. If you don’t agree to repair damage that is covered by insurance, the insurer still owes you for the value of repairs that your car needs to be restored to its former condition. However, if this is the situation, your insurance company will not be required to insure the car for its full retail value.

Road accidents

When an accident occurs in a street, several factors make it hard to determine what will be done on the part of insurers. For an example, motorcycle riders are in high risk in terms of injury even though the impact of collision is lower than that between cars. Cyclists are the most vulnerable riders, bus accidents are the most serious because of buses size and the number of passengers involved. In bus accidents, the operator of the bus is included in the payment of losses. To prevent from accidents, be careful on unsafe roads, don’t race with other drivers and drive safely.

Insurance for expensive cars

If you own an expensive car, keep in mind that your insurance will differ immensely than those who own ordinary cars. As expected, you will pay higher premiums because there is a higher risk of theft when you are driving a valuable and flashy car. You could ask the company questions so that you would be clear about what you pay for and what additional coverage you are required to have. If you don’t want to be limited to a certain company, ask a broker or your state service insurer. You’ll learn from them and they will be able to show you to people who may help you further in purchasing the right insurance for your expensive car.

Things you need to know about Diminished Value

Diminished value is a financial loss which can be compensated. This commonly occurs in many claims from car accidents, but many owners don’t know that they are entitled to cash in addition to repairs done to their car. The basis of this claim is the insurance carrier’s duty to restore the position that the owner of the damaged car has before the accident. Also this includes losses sustained from wrong repairs. If their car sustained structural damage and was repaired with cheap parts, the market value of the car will decrease, thus the value diminishes. Now you know about diminished value and how it could be compensated, don’t be fooled about getting your car repaired with cheap parts or without additional cash payment.

Car use affects car insurance

The way you use your car affects the cost of your insurance. The more you drive, the higher the risk that you’ll be involved in a car accident. Because of this, frequent drivers often pay higher premiums than those who don’t drive much or those who take the public transportation. Also, the insurers would consider the person driving the vehicle. Does he have a disability? Poor eyesight? Back aches? If there is an inexperienced driver in the car, the risk increases and so does the premium. If there are different drivers using the car, there would be a greater possibility that the one who drives can’t drive well and have an accident, thus premium increases also.

Online auto insurance

Nowadays, you could purchase online insurance quotes. You could also purchase auto insurance policies from web sites. If you’re looking for cheap auto insurance, you could search by typing a few key words. By doing so, you could learn a lot from saving on premiums to what liability insurance means. You could compare an insurance company with another and a policy with another so that you could get what is most suited for your needs. You could also visit online forums where you could talk with other users regarding the policies they purchased and what they think about the companies.