Types of Auto Coverage
The law is that as long as you own a car you must have insurance. In 2001 and 2002 auto insurance premiums rose drastically. The fact that the emergence of baby boomers into late middle age is lowering accident rates and cars are becoming safer is helping to lower the cost of auto insurance. Despite these changes annual auto insurance premiums for Americans remain close to or above a thousand dollars. Because auto insurance coverage is specific, individual annual auto insurance premiums can vary drastically. Individual rates depends on the following factors:
" The driver's age.
" The driver's record.
" The type of vehicle.
" The age of the vehicle.
" Where the driver lives.
By choosing coverage specific to your individual needs and doing some careful shopping, you can get a good deal on your auto insurance.
Before you start looking for auto insurance you need to understand the three types of coverage available: liability, collision and comprehensive. Each of these types of coverage account for a part of the premium you pay for your auto insurance.
Taken together the collision and comprehensive sections of an auto insurance policy make up 40 percent or more of premium costs. In addition, these two sections involve a deductible that must be paid before the insurance starts on the claim. Some auto insurance policies may also include medical payments for you and your passengers regardless of where the fault lies in an accident. Other auto insurance policies may include uninsured motorist protection in case an uninsured driver hits you.
Most auto insurance policies offer low-cost additions, or riders, that you can add onto your policy depending on your personal preference. These additions may include rental reimbursement in case you are without your car for a period of time after an accident or in the event of regular mechanical repair. Some insurance will allow you to add-on towing insurance.
The following is an explanation of the three types of coverage:
" Liability: This coverage is to protect you when you are the one that causes the accident, or are "at fault."
" Collision: This coverage pays for any repairs your vehicle requires or for the replacement of its market value if your car is beyond repair after an accident. This coverage applies regardless of who caused the accident.
" Comprehensive: This coverage pays for repairs or the replacements of your car if it is stolen or damaged in a fire, flood or high winds.
You can reduce your insurance costs significantly by choosing only liability coverage. Consider this option only if your car is already paid for, and/or would be cheaper to repair/replace than to insure with full coverage.
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