A Car Insurance Manual to Keep You Moving Safe
Accidents can happen at any time and it’s car insurance that keeps your finances safe. Whether the collision is your fault or someone else's, car insurance coverage is there to help you.
However, how much your car insurance helps is up to you and determined by different options that make up your insurance policy. Learning more about the car insurance manual can help you make the right choices.
Car Insurance Coverages
There are a number of things you will find that your car insurance covers if you are looking at a car insurance manual.
Bodily Injury Liability
This is the part of liability coverage that will pay for medical bills if you injure someone in an at-fault accident.
Property Damage Liability
This is similar to bodily injury liability but instead covers property damage you have caused in an accident.
Personal Injury Protection
This covers medical expenses for you and passengers after an accident.
Uninsured/Underinsured Motorist Insurance
This helps cover costs if you are in an accident caused by a driver that doesn’t have any insurance or doesn’t have enough insurance.
Comprehensive
This add-on covers damage to your car that happens in an event that is not related to an accident. Events that can be covered include weather, vandalism, and if your vehicle is stolen.
Collision
This will cover damage to your own vehicle after an accident, no matter who caused the accident.
Choosing Your Auto Insurer
Choosing the right type of car insurance is just the first step in the car insurance manual. You also need to make sure that you choose a good insurance company if you want to make sure that your claim will be paid in a timely manner. There are some qualities that you should look for when choosing an insurer for your auto insurance.
Reasonable and Reliable
Insurance companies should give you reasonable coverage for what they are charging and the company should be reliable. In some states, there isn't much of a difference in price because of certain state mandates. However, in many states, companies will quote different prices for similar coverage.
Check Licenses
Providers should be licensed by the state where they are selling insurance. For added peace of mind, you should make sure that you check with your state's department of insurance to verify the license of the company you are considering working with.
Check Financial Stability
It’s important to learn more about the financial stability of the insurance company you are choosing. This is important because it determines the ability of the company to pay for a claim you submit. While the major insurance companies are typically safe bets, this can be helpful if you are looking to go with lesser-known providers.
Check Customer Complaints
Your state's department of insurance is a good resource when it comes to researching your insurance providers and helping put together your car insurance manual. There are many departments that publish consumer complaint ratios for the providers in their state. The ratio will tell you how many complaints an insurance company received from its policyholders. Check this on several sites so you can have the best idea.
Compare Rates
The last step in picking an insurance company is comparing rates. Get quotes online. You can submit information on websites that publish quotes or you can look at your top five options and then submit information on each respective website to get a direct quote. Keep in mind that some quotes will be instant while others will be sent later. Some may put you in touch with an agent that is local who will calculate the rate for you.
Not every company will provide quotes online and you will have to call. Be sure to ask for written documentation of the verbal quotes that are offered. Remember that your state’s department of insurance can be a great resource. Many states will provide pricing information across licensed insurance companies so you can get some research without having to visit individual sites.
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How Your Driving Record Affects Rates
Your driving record is a big factor in determining premiums from car insurance providers and your driving record is going to be an important part of your car insurance manual. Usually, a good driving record means lower premiums. A history of traffic violations and accidents makes you a higher risk to insure and this means you are likely to pay more.
Car insurance companies can’t pull your full motor vehicle report but it can pull a summary listing of your accidents, recent tickets, and convictions. The period that the insurance company looks at varies by state and the insurance company. This period is between three and five years but it can also be longer. For example, in California, a DUI can be on your record for 13 years but an accident stays on your report for 36 months.
Risk Assessment
As part of the underwriting process, the car insurance company conducts a risk assessment. The risk assessment includes determining how to classify the applicant as either low risk or high risk. The best way to conduct this is by reviewing driving history, which will usually include accidents and moving violations. If there are several accidents, the driver is more likely to have problems in the future, which increases the liability.
Even if you have to pay an increased insurance rate because of a bad driving record, it may not be permanent. Once your infractions drop off the insurance summary they won’t be considered when the insurance company is determining your premium.
If you are shopping for car insurance, it may be a good idea to check your driving record. Checking this before you apply will allow you to correct anything that is inaccurate. Getting a copy is pretty easy and you should check through your state’s Department of Motor Vehicles. You will be charged a small fee for this report.
Are You a Good Driver?
Since you know from a car insurance manual that you need to be a good driver, you can figure out what type of driver risk you have just by doing a little research.
Preferred Risk Driver
A preferred risk driver has a lot of positive characteristics that an insurance company will like. These drivers get the best rates and have low claim activity. This puts you in control since it’s easier to shop around for an insurance company you like to work with. In order to be a preferred risk driver, you should be 25 or older, have a clean driving record, good insurance credit score, and minimal or no at-fault claims. You usually need to have insurance for the past six months and carry liability limits that are higher since it’s the best protection against a lawsuit.
Standard Risk Driver
When you are a standard risk driver, you are in the middle between the best and worst drivers. You are likely to get a policy but you have room to improve your rate. If you are a standard risk driver, you have one to two minor traffic violations and only one at-fault accident.
High Risk Driver
This is not an ideal classification. Rates can be higher, especially if you have financed a vehicle and need to have full coverage. If you are a high risk driver, you are more likely to have multiple claims and some high risk drivers have let their insurance lapse, which means they are in a cycle of high rates. Some characteristics of a high risk driver include no prior insurance, major traffic violations, or a combination of tickets and at-fault accidents. A low credit score doesn’t necessarily mean you will be a high risk driver but it can also play a role.
Getting Answers about Care Insurance Claims
Part of a car insurance manual is using your car insurance and dealing with claims. Claims can be confusing and many people have questions about what to do if they're in an accident that aren’t always covered under a car insurance manual.
Do you need a police report?
If you want to file a claim with your insurance then you need to have a police report. If there is more than one driver involved, it’s a good idea so you can prove exactly what happened and the injuries.
Is your car going to be totaled?
The value of your car will play a role in whether or not it’s going to be totaled. If the value of the repair is higher than the value of the car then it will most likely be totaled. Many states will have different formulas for covering this while others just use a percentage threshold.
What do you do after a total loss accident?
Contacting your insurance agent and finding your title are two of the steps you need to take after being in an accident involving a total loss. Learn what you should do from your agent to make sure you get your money as quickly as possible.
How is a single car accident dealt with?
Single car accidents are usually considered at-fault accidents. If you file this type of claim then you will likely get hit with a surcharge when your insurance is up for renewal.
Should you pay for an at-fault claim yourself?
If you are deciding whether or not to pay for the claim out of pocket, you should weigh how much the deductible, damage cost, and the at-fault accident surcharge are. Compare these numbers to figure out if it’s worthwhile to file your claim.
What if there are multiple insurance claims?
Multiple claims can usually be a bad thing. Some insurance carriers won’t renew your policy if you have two at-fault accidents within a three-year period. Each insurance carrier differs on guidelines.
What if someone borrows your car and gets in an accident?
The insurance policy that lists the car is the one that covers damages.
What replacement parts are covered?
The replacement parts covered will depend on your particular policy. If you have purchased insurance that covers OEM parts then your repair will be done using these parts. Otherwise, the repair will likely use aftermarket parts since they're cheaper.
How to Save on Car Insurance
When looking at the car insurance manual, there are a number of ways to lower your car insurance.
Multiple Drivers or Multiple Cars
If you get a quote from a company to insure just one vehicle, you could end up with a higher quote than if you asked about several vehicles or drivers. Insurance companies offer a bulk rate since they want your business. The multiple drivers need to live at the same residence and be related by marriage or blood. However, if your driver is a teenager, you are going to have to pay more to insure them. You may also get a discount if you have other policies with the company, such as your home insurance.
Be a Safer Driver
This should be a given but with so many car distractions, it helps to repeat it. The more careful you are about avoiding moving violations or accidents, the easier it is to avoid things that will raise your car insurance. Points will usually be assessed for moving violations and the more points you have, the higher the insurance premium.
Take a Defensive Driving Course
An insurance company may give you a discount if you complete a defensive driving course. This can also help reduce the points on your license. Ask your agent about this before you sign up.
Shop Around
If your policy is set to renew and your premiums have gone up then now may be the time to shop around for premiums. You never know when there can be a lower rate out there. Keep in mind that cheap doesn’t necessarily mean good so you need to still do your research.
Keep Your Car in Mind
It helps to remember that bigger cars cost more. Some insurance companies give you a discount if you have a hybrid car. This way, you can feel better about protecting the environment while saving money.
Increase the Deductible
When you get car insurance, you are choosing a deductible. Your deductible is what you pay before the insurance kicks in. The lower the deductible, the higher the premium.
Improve Your Credit
A driver’s record can be a big factor in auto insurance but you may also be surprised to learn your credit plays a role.
Learn about Additional Discounts
An insurance company will provide a lot of different discounts. Learn about discounts, such as paying in full or having memberships in particular organizations. Don’t necessarily be tempted by long lists of possible discounts. Compare both the regular and discounted prices from different insurers so you can make sure you are getting the best rate.
Review Your Coverage
You may be paying for coverage you don’t need. You may not actually need all the add-ons to your policy, such as car rental coverage or roadside assistance. Go over your policy line by line and ask about removing things you don’t need.
Insurance for a First-Time Driver
First-time drivers have a lot to learn from the car insurance manual. Car insurance may not be the first thing a driver thinks about but it’s important. The best way to get car insurance is to be added to an existing policy. Typically, someone in the household has a car insurance policy, whether it’s a parent or guardian, and you can try to be added to the policy. There are benefits to being added to another driver's insurance policy. There is the benefit of being protected yourself but there are some other reasons to be added.
Proof of Prior Insurance
A first-time driver doesn’t have current car insurance and a car insurance company considers an uninsured driver high risk. This means you pay a higher premium. If you are added as a driver on an existing policy then it’s almost an instant discount built in the premiums.
Other Discounts
When you are added to an existing policy, you will also have access to many more discounts. A first-time driver doesn’t have multiple cars or own their home but the guardians might and these discounts are automatically extended to you.
Low to No Down Payment
Having no down payment or a low down payment is another benefit. Usually, starting a new policy requires more than a single month payment but if you are being added to a current policy then the increase in the premium usually gets billed in the next billing cycle.
There are some things that a first-time driver can do that other drivers can also do to save money. Be sure to shop around to find the cheapest rates. Many companies will give you a discount if you pay in full since it shows your commitment to maintaining continuous insurance. Shop every six months to make sure you are getting the best rate. You don’t just want to set it and forget it.
In Conclusion
Learning more about a car insurance manual can make it easier to find the right car insurance policy for your needs and find the right insurance company to work with. Your rates are going to be determined based on your driving record but you can learn more about your driving record before you start shopping around for a policy. If you are getting insurance for the first time, there are some things you should know.