Skip to Auto Insurance Considerations for All Life Stages Special Considerations for Established Families At this life stage, your cute little kids become teenage drivers, competing with you for the car. In addition – as you enter that mid-life period – your own automotive interests may steer you towards different types of cars than you’ve previously driven. Here are some tips to prudently control your auto insurance costs: Considerations for All Life Stages Auto insurance is one of the most frequently used types of personal insurance. In fact, states require that you purchase some kind of insurance coverage in order to drive legally. There are two basic components to auto insurance coverage: liability and property damage. Liability Coverage Most auto insurance policies cover your liability for bodily injury, property damage and uninsured/under-insured motorists. Bodily injury liability insurance protects you against the claims of other people who are injured in an accident for which you were at fault. Their claims for bodily injury may include medical expenses, lost wages and pain and suffering. Property damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles, but also other property, such as walls, fences and equipment. Uninsured motorists coverage protects you, the policyholder, in the event that you are injured by a hit-and-run driver or a driver who does not have auto insurance. Property Damage Coverage Property damage coverage may include both collision coverage and comprehensive coverage. Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is optional and not required by law. However, collision insurance may be required by your lending institution or lessor. In the case of an accident involving an older car, the cost of repairing the car can quickly exceed the worth of the car. In this case, insurers will “total” the car and pay you what the car was worth based on its current book value rather than fix it. Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. You are not required by law to carry comprehensive coverage. Your auto insurance premiums are affected by a number of factors: The number of claims you have previously filed impacts your insurance costs. You may want to consider not filing claims for smaller events to avoid premium increases. Finally, the cost of your insurance is directly linked to your policy’s deductible amount. The deductible is the amount of money that you agree to pay as part of a claim, before your insurer pays the remaining amount toward that claim. For example, if your vehicle incurred $1,000 of damage in an accident and your deductible was $250, you would pay the first $250 and your insurer would pay the remaining $750. The higher the deductible, the lower the premium. Content Last Modified on 8/25/2008 11:26:41 AM |
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