Insurance World

Most states require that a vehicle be insured before it can be driven on public streets and highways. It is important to understand the terminology of your auto insurance policy so that you know that you have the necessary insurance coverages for your area. Take time to review your car insurance to make sure you have what you need.

Deductibles:

The deductible is the portion of a covered loss that is your responsibility. The deductible applies to each covered loss. Deductibles vary by state but are typically in the amounts of $100, $250, $500 or $1,000. Usually, the higher the deductible the lower your premiums. Of course, the amount you must pay out of your pocket increase with the higher deductible.

Coverage:

There can be many types of coverage included within one single auto insurance policy. Insurance coverage requirements vary by state and usually include the following types of coverage:

Liability: Liability coverage pays for accidental bodily injury and property damages to others when the insured person is legally responsible for an accident. Bodily injury damages include medical expenses, pain and suffering, lost wages and other special damages. Property damage includes damaged property and may include loss of use. Liability coverage also pays defense and court costs.

Personal Injury Protection: Personal Injury Protection is required in some states. It pays medical expenses for covered persons, regardless of fault, for medical treatment due to an auto accident.

Medical Payments: Medical Payments Coverage is available in most states. It pays medical and funeral expenses for covered persons, regardless of fault, when those expenses are related to an auto accident.

Collision: Collision coverage pays for damage to a covered vehicle caused by collision with another object or automobile.

Comprehensive: Comprehensive coverage pays for loss of or damage to a covered vehicles, not caused by a collision or accident. Examples include loss caused by fire, wind, hail, flood, vandalism, theft or hitting an animal.

Uninsured Motorist: Uninsured Motorist coverage pays damages when a covered person is injured by an auto accident caused by a driver who does not have liability insurance.

Rental Reimbursement: Rental Reimbursement pays car rentall expenses when your auto is disabled due to an accident.

Emergency Road Service: Emergency Road Service pays expenses incurred for having your auto towed as a result of a breakdown.

Who is covered under an auto policy?

Your policy usually covers you, your spouse and other relatives who live in your household and others who have permission to drive one of your covered vehicles.

The car insurance industry has got really competitive in the last few years, so prices haven’t really changed much. There are now over 100 car insurers to choose from, so there are some very good deals out there for those who are prepared to shop around. 23% of motorists still choose to insure with the same company as the year before, but they could undoubtedly save money if they did check out some other companies.

Motorists could be forgiven for not getting other quotes, it used to be a very laborious exercise involving long waits while getting routed through the call centre, and boring repetition of facts to sales advisors. Now, thanks to the internet, it’s all a lot more simple. Car insurers also offer extra discounts to people who buy online.

However, you need to consider the quality of the policy, not just the price:

• Check that your low quotation is not due to an extremely high excess.

• Check that you will get a courtesy car if your car needs to be taken in for repairs.

• Check that legal insurance cover is included, if you want it, and automatic windscreen replacement.

• Find out if there is an accident help line in case of an emergency.

It’s a good idea to ring the insurer direct to talk through the policy in detail before signing up online.

Money saving tips – recommended!

You can get a quote with over 40 car insurers if you input your details into a good car insurance broker’s website. You’ll only need to give your details once. Call the insurer with the quotation to check exactly what is and isn’t covered.

If you have a garage, then you’ll save by keeping your car there overnight. You’ll also make savings if you can keep your car on a driveway. This is because there is more chance your car being broken into or vandalised if it’s kept on the road.

Give your insurer an accurate picture of how many miles you do each year – you will save if you travel less.

Some occupations, like being a landlord, journalist or professional footballer (if only) attract higher premiums. You can save money if you work in finance or the civil service.

Get married! Men under 30 pay more if they’re not married – it’s just the excuse your girlfriend is looking for!

Under 25’s pay more, but you can get lower premiums if can put a driver over the age of 25 with a good driving record on your policy as a named driver. That person must be under 60 though, as premiums rise again at that age.

Agreeing to higher excess (the average cost is Ј100) will help lower your premiums.

If your car is not of a high value, you could get third party cover and make quite a saving compared to fully comprehensive insurance.

Pay as you go insurance is a new option for 18-21 year olds. It’s a recent development introduced by Norwich Union, in which you pay a unit cost per mile. The cost per mile is more between 11pm and 6am. You pay an initial fee of Ј199 to have a Global Positioning System fitted to your car, and then it transmits details of your mileage direct to Norwich Union. They send you a monthly invoice and you pay for the miles you’ve done!

Taking Pass Plus lessons to improve your driving abilities could save you around a third on your premiums. They cost Ј15 - Ј30 an hour and cover driving at night, in busy rush hour jams and fast motorway driving. You can find out more at www.passplus.org.uk . You can also improve your driving skills and make insurance savings with the Institute of Advanced Motorists ( www.iam.org.uk ).

Find out the insurance group of a car before you make the purchase. There are twenty insurance groups – the slower and less desirable the car (to criminals) then the lower the rating. You could make considerable savings by choosing a car in a lower insurance group.

If you want a high spec or performance car then you can expect to pay a lot more on your insurance. They’re a lot more likely to be stolen or involved in an accident. Making the sensible choice might be a bit boring, but it will be a lot cheaper.

Watch your speed. Most insurance companies will let you get away with a single fixed penalty fine but if you repeat the offence then your premiums will rocket.

Protect your no claims discount as soon as you can (usually after four years). It costs a bit extra but it’s well worth it.

Satellite navigation in your car will lower your premiums. Insurers have found that people concentrate more on their driving and less on trying to find their way, which means less chance of having an accident.

It’s a good idea to have an engine immobiliser or alarm fitted not just because it could help you keep hold of your car, it will also make you a saving of 5-8%.

If there’s two or more cars in the household, get them on the same policy to get a good discount.