Getting your vehicle insured can be a complicated and stressful process. Not only are there so many insurance providers in the market. There are also unfamiliar terms, myths, and misconceptions surrounding auto insurance. If you are thinking about buying auto insurance, here are four things you should know to make the process more manageable.
1. There are different types of car insurance
It is important to know what’s included in auto insurance in order to understand what’s covered and what is not before paying your premium. The kind of risk covered often depends on the car insurance you sign up for. Here are the different types of car insurance:
a) Comprehensive car insurance
Comprehensive insurance covers damage to your car caused by incidents that are not auto accidents or collisions. It could be vandalism, fire, floods, hail, hitting an animal, damage caused by falling trees or rocks, or when your car is stolen.
b) Collision auto insurance
Collision insurance caters to damage caused by a collision with another car or object, even when the incident is your fault. It can also pay for repairs resulting from rolling your vehicle or potholes.
c) Uninsured coverage
Uninsured motor insurance offers monetary protection when involved in an accident, and the other party involved does not have auto insurance. It can also provide protection when you are involved in a hit-and-run.
d) Liability car insurance
A liability vehicle insurance pays for expenses accrued from an accident where you are legally established to be at fault. The two types of liability coverage include:
- Property damage: Pays for repair and replacements for the property you damage using your car.
- Bodily damage: Pays for costs related to death or injuries on other parties, including pedestrians, passengers, or the other driver.
2. There are various car insurance discounts
Insurance companies often offer various discounts you could leverage to reduce your insurance bill or identify an affordable policy. Some car insurance discounts that could help you save include:
- Multi-vehicle discounts
- Discounts for payment frequency
- Transfer discounts
- Discounts for advanced quotes
- A defensive driving course
- Homeowners insurance benefits
- Anti-theft gadgets benefits
3. Various factors affect car insurance premium rates
Auto insurance premium rates vary from one company to another. Different insurers use distinct formulas to assess risks before deciding how much you should pay for coverage. However, there are basic factors that contribute to premium rates for most insurance companies, including your vehicle’s model, driving record, and vehicle use. Other factors that determine your insurance rates include:
- Your location: People living in urban areas are likely to pay more than insured individuals in rural areas due to the high crime rate in towns
- Credit score: A driver with no or bad credit score will likely pay higher rates
- Marital status, gender, and age
4. Raising your deductibles can reduce your premiums
Your auto insurance premium rates are determined by how much the insurer speculates they will pay. If you decide to cover a more significant portion of the damages accrued by increasing your deductibles, then the insurance company will not incur much during a claim. This could result in your insurer lowering your premiums. Ensure that you establish that you can afford to cover damages in case of an accident before raising your deductibles.
Auto insurance can make the aftermath of a truck accident more manageable. Familiarize yourself with the industry jargon, and debunk the myths and misconceptions surrounding car insurance to get the best policy for your vehicle.