Shopping For Insurance

Shopping For Insurance

Most vehicle owners transfer their existing insurance policies over to their new car. If you've been with the same company for a long time, however, it doesn't hurt to see how they measure up to other carriers. The difference between insurance companies can be staggering!

Don't sign anything until you find out what your insurance costs will be. Before you buy, get a quote on the car you want from an experienced online insurance broker like Insurance broker present your driving history and vehicle choice to a number of the leading auto insurers like State Farm, Progressive , CNA and Liberty Mutual then present you with the best rates. You'll be surprised by how much some cars cost to insure, and at the difference in rates from one company to the next. Knowing your insurance costs before you buy, you can budget to accommodate the insurance.

How Are Insurance Rates Determined? - In setting premiums, insurance companies rely on some factors not directly related to the vehicle itself. Rates are affected by your zip code, age, gender, marital status, driving record (tickets & accidents, both yours and your family's), and finally the make, year, model, and type of vehicle you're insuring.

Required By DMV - To get new tags for your purchase, in addition to your driver's license you must present proof of insurance to your state's Department of Motor Vehicles (DMV). Your insurance agent will give you a new insurance identification card, listing your carrier, policy number, VIN# (vehicle identification number), and your name and address. Make sure the VIN# is correct and that the address on the card matches your driver's license exactly.

Pitfalls To Avoid - If you're in the majority of drivers whose driving record isn't perfect, don't lie about it when you're getting online quotes. Insurance companies will check your driving record. They will even find out about your out-of-state tickets and accidents. You can be charged with fraud!

If your driving record is questionable, get a copy of your driving record before shopping for insurance. "Questionable" means accidents you were involved in and traffic tickets you may have received, any time in the past 5 years. Even if you were found not at fault or not guilty, or you paid off your tickets like a good citizen, check your record to make sure your compliance has been noted.

Either go through reputable insurance brokers or buy direct from well known national companies like State Farm, Travelers , Fireman's Fund , Allstate , AIGProgressive, CNA, and Liberty Mutuall. Avoid brokers who guarantee coverage for all while advertising their low down payments; they sell policies from under-funded high-risk insurance carriers. The best way to evaluate an insurance company is to research its A.M.Best rating, which tells you its ability to pay off. Try to buy insurance only from companies with "A" ratings. Go no lower than "B."

Types Of Insurance Coverage - Insurance policies can be confusing, and if you don't understand the different types of coverage, you may leave yourself financially compromised. On today's sleek cars, a little tap on what used to be the bumper can cost you $1000. If the damage extends to a fender or hood you may be up to $2500. A solid hit in the front of your vehicle will set you back a minimum of $4000, and if the engine or drive train is involved your loss may exceed $10,000. Most new and late-model vehicle owners can't afford that kind of loss, so l recommend comprehensive and collision insurance for every vehicle I sell. If you finance a car through a bank or car dealer, the lender will require them both anyway. Car dealers cannot allow a vehicle to be delivered without first obtaining an insurance card that has the purchased vehicle's VIN# on it. Here's a list of the common types of coverage:

Bodily Injury and Liability - This mandatory coverage protects you in the event you cause a crash that injures someone. It also covers your legal defense if needed. Bodily Injury and Liability is made up of two amounts (eg: 100,000 / 500,000). The first limits the amount of medical payments to a single person per incident, while the second puts a cap on the total amount paid out to all injured persons per occurrence. I recommend the most coverage you can afford.

Car Rental - If your vehicle is in the shop for repairs resulting from an insurance claim, this coverage generally pays $15 per day for a rental car for up to 30 days. Good luck finding a rental car for $15 a day. Most sub-compacts start at $25 per day, with luxury models priced at $50 or more. In addition, severely damaged vehicles are almost never repaired in the first 30 days. I've sometimes had to wait weeks just to get a customer's car looked at by their insurance adjuster. Get the highest limits available; they only add a few dollars to most policies. They pay for themselves if your car is severely damaged and off the road longer than a month.

Collision - Collision coverage pays for physical damage to your vehicle caused by a collision. If you're judged to be at fault, this coverage pays to fix your car. If your vehicle is worth more than $4000, I urge this coverage. Get a policy with a $250 deductible or less, if possible.

Comprehensive - This covers fire, theft, and damage from acts of God like ice storms, tornados, hail, and floods. It also covers you if your vehicle hits a deer or is vandalized. Another highly recommended coverage (get the $250 deductible) if your vehicle is worth $4000 or more.

Credit Insurance - Popular with dealers. Pays off your auto loan should you die or become permanently disabled. Premiums range from $10 to $40 per month. I cannot recall a single instance of any customer using this coverage, and you can't be forced to buy it. If your impending death or disability worries you, check your coverage under life insurance or disability policies you already have. If you need it, your insurance agent can probably add it to your existing policy for a fraction of what the dealer would charge.

Full Glass - Comprehensive covers your windshield, because it's against the law to drive with a broken windshield in most states. But for the rest of your windows, you still have to pay your comprehensive deductible before they'll pay for any broken glass. Get this inexpensive (sometimes free) coverage, especially if you spend a lot of time at the mall or live and work in a relatively high-crime area.

Gap Insurance (Leasing Only) : Gap insurance covers situations such as the theft or totaling of the car, when you end up owing more on the lease than the car is worth. Standard insurance will pay up to the car's current value, perhaps even the replacement value. But if you owe more than that, you still have to pay the difference. Gap insurance will do this for you.

Liability - This mandatory coverage takes effect if you are judged at fault in a collision. It pays to fix vehicles or stationary objects destroyed by your car. Get the most coverage you can afford.

Medical Coverage - In states without no-fault, this covers medical expenses for you and your passengers, no matter who was at fault in the crash. Get the most you can afford. (similar to PIP)

No-Fault Insurance - Although some states still don't have this beneficial insurance, No Fault is mandatory in most states. It pays medical expenses for you and your family, the passengers in your vehicle, and any pedestrians you may injure in an accident. The insurance is paid out regardless of who was at fault. (It does not cover property damage of any kind.) The medical benefits of a no-fault policy are sometimes called Personal Injury Protection.

Out-of-Country Coverage - If you travel to Canada or Mexico on a regular basis, make sure your automobile insurance coverage follows you. It may be necessary to take out country-specific policies if your carrier won't cover you. You especially don't want to get in an accident south of the border without a good policy. I consider this mandatory for anyone traveling in our friendly neighbors to the north and south.

Personal Injury Protection (PIP) - The medical portion of your no-fault insurance policy. Get the most you can afford.

Towing - not necessary if you take my advice and get AAA Plus, which is a better plan with a multitude of benefits insurance-company coverage can't compete with.

Underinsured or Uninsured Motorist - Everyone should have this coverage, because it protects us from all the low-lifes who drive around with cancelled policies. In most states you have to show proof of insurance to register a vehicle. Some people, however, take out a policy for registration purposes only, then let it get canceled by failing to send in their first installment payment. Luckily many states are cracking down on these criminals, by requiring insurance companies to notify the state when an automobile policy gets cancelled. The state's DMV then revokes the registration of the non-insured vehicle and notifies the registrant that the plates must be surrendered at once. If the plates are not turned in, the state suspends the owner's driver's license and revokes the vehicle's registration. In order to get the license back or re-register the vehicle, a hefty fine must be paid for each day the vehicle was driven without tags and insurance. An uninsured motorist caught driving with a suspended license in a car with a revoked registration goes to jail. If they hit your new car they still go to jail, but no one pays for the damage they caused unless you have Uninsured Motorist Coverage. Underinsured Motorist policies pay for injuries up to YOUR policy limit when the other driver either has no insurance, or their minimal coverage can't pay for your injuries or property damage. Hit-and-run accidents are usually included in this type of coverage, but make sure you're covered for them regardless. I consider this mandatory coverage, although most states don't. Get the most you can afford.

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