The Ins and Outs of Auto Insurance
Insurance is one of the few things you buy that you never hope to use. This is why people will often avoid buying certain kinds of insurance. Many people in the United States do not have any kind of life insurance, for example. Even fewer people go for disability insurance, though pet insurance is becoming more and more popular as the expenses for taking care of a pet can be high. Auto insurance falls into a different category because drivers are required to have that.
There are different types of automobile insurance, they include:
- Liability coverage is the only kind of auto insurance that is required by law. If you are in an accident, it will cover any costs associated with the injuries that the other party suffers. It will also cover any claims that may occur if that accident results in a death. This is the bare minimum that drivers have to have in order to drive.
- The next level of auto insurance is collision insurance. This covers any damage to your vehicle if you are in an accident. While it is not required by the state, if you have not paid off your car, your loan will require you have it. The reason is simple. Until you fully pay off your car, you do not actually own it. The company with whom you have your loan does not want you to total the vehicle and then not be able to repair it.
- After collision, you can move for more comprehensive auto insurance, you can get comprehensive auto insurance. This coverage will help you if your car or truck has been stolen but also will cover damage from fire, water, vandalism or anything else. This can be great for peace of mind because all of these things happen.
There are things you can do to impact the rates that you pay for your auto insurance. There are also other things that auto insurance companies look at when they decide how much to charge you for your policy. Here are a few things they take into consideration.
- They look at your age and gender. It may not be legal to discriminate for work but if you are a guy and/or you are under 25, you will pay more for your auto insurance. There is a good reason for the age part. The human brain changes a lot around that time. Teenagers and people in their early 20s are more impulsive and take more risks. Younger drivers may lack the experience behind the wheel that older drivers have.
- They look at your driving habits. The amount of time you spend in your car, what your use your vehicle for and the distances you travel will have an impact on what you pay for auto insurance. If you take any kind of class such as a defensive driving class or if you have anti-theft devices on your vehicle, most companies will give you a lower rate. The more you can do to show you are a very careful car owner, the better. Another thing they look at for your driving habits are any speeding tickets or moving violations. They both will increase your auto insurance rates.
- The auto insurance company looks at where you live. If you live in an area with a lot of crime, you will pay more for your policy. There may not be much that you can do about your area but you can put in an alarm or other kinds of theft prevention devices and services to mitigate the costs of living in a high crime area.
- They consider your deductible. Lower deductibles cost more to maintain. If you have a higher deductible, you will pay much less out of pocket. Many people opt for a $500 deductible.
- They want to know how many claims you have filed. If you have had a lot of reasons to file claims, you will pay more for your auto insurance. This is one reason many people go with a $500 deductible because there are a lot of repairs that cost less than that to do.
Getting the right auto insurance can take some effort and research but it is worth it to take the time to do it the right way.