Auto Insurance online - How it protects you and your vehicle

by Guest » Mon Dec 21, 2009 09:12 am

Every state requires you to purchase a minimum auto insurance or vehicle insurance coverage to protect you and others from damages caused by an accident. However, what kind of protection you will get depends on your state's auto insurance laws.

What is auto insurance?

Auto/vehicle insurance is where you pay a regular premium and the insurer compensates you for any financial loss that occurs if you get involved in an accident.

Because every state requires you to have the state minimum coverage, you should look for affordable auto insurance that will protect you if you have an accident. If you are a good driver and haven't had any parking tickets or accidents recently, then most insurance companies will offer you discount auto insurance policies.

What does auto insurance cover?

Your basic policy should cover the following:
  • Bodily Injury Liability: This provides protection if the driver, policyholder, or the policyholder's family member causes bodily injury to someone else.
  • Personal Injury Protection (PIP): If the passengers and driver of the policy holder's vehicle are injured, PIP covers the cost of treatment and may also cover lost wages, cost of replacing services, and funeral costs. Search the internet for best auto insurance rates.
  • Property Damage Liability: If you or someone else permitted to drive your car damages others' property, this coverage will protect you. When you look for free auto insurance quotes, make sure you will be covered under the Property Damage Liability coverage.
  • Collision coverage: This compensates for damage to the policy holder's car as a result of collision with another car. Even if you are at fault, this term will cover the cost of repair to your car minus the deductible. If you are not at fault, then your insurer will try to recover the cost from the other driver's insurer.
  • Comprehensive Coverage: Many of you may be asking yourselves "What is comprehensive auto insurance protection?". If you suffer a loss due to theft or a damage caused by something other than a collision, like a fire, explosion, earthquake, or windstorm, then this protects you.
  • Uninsured/Underinsured Motorist Coverage (UM/UIM): Individuals who buy cheap car insurance are often underinsured and do not have enough money to pay for losses if they are involved in an accident. If an uninsured, underinsured, or hit-and-run driver hits you or your family member, this term will reimburse the cost of your damages. You will also be protected if you are hit as a pedestrian. When you buy car insurance compare quotes for UM/UIM coverage from different companies.

What are the benefits of buying auto insurance online?

With many companies offering online auto insurance quotes, it is easier for you to research the policies, terms, and conditions and compare them. You can also check the company's auto insurance reviews to make the best choice.

Here are 4 benefits you can get if you buy auto insurance coverage online:
  • Easier research: The internet allows you to do extensive research on various companies without having to visit each company. You can easily find the cheapest legal auto insurance online to suit your budget.
  • 24/7 service: This is the best part about looking for information online; you can find information when you need it.
  • Manage a policy: You can manage your policy, print out proof of coverage, and view/ manage your bill online.
  • Claim: You can even file a claim online and follow it up online.

Which factors influence your auto insurance rates?

When you apply for an auto insurance coverage, the company sends over your application to the underwriters. The underwriters evaluate the level of risk associated with an applicant, and accordingly approve and fix his/her rate or reject the application. The factors which are usually considered for the auto insurance underwriting process are:

  1. Age and gender of the driver
  2. Driving records/ history of the one to be insured
  3. Prior claims history
  4. Efficiency of the driver (driving education)
  5. Model, make and type of the vehicle
  6. Age of the vehicle
  7. Mileage of the vehicle
  8. Location (where it'll be used)
  9. Purpose for which the vehicle is used (work, personal, pleasure or commercial etc.)
  10. How the vehicle is garaged
  11. Your choice of deductible, limits of coverage and benefits
  12. Auto insurance score
To know how these factors affect your auto insurance rates, click here.

Converting to a low cost policy

Discount auto insurance schemes can help you convert your basic policy into a low cost auto insurance policy. You can find many cheap auto insurance quotes that will allow you to save money and provide adequate coverage. Take a look at few of the ways to save money.
  1. Safety measures: A few insurers offer discounts for safety measures like anti-lock brakes on used cars.
  2. Multiple policy rates: Some of the bigger insurance companies that provide different types of insurance offer "bundle" rates if you buy several kinds of insurance, like life insurance and homeowner's insurance in addition to your car insurance.
  3. Safe driver's discount: In many cases, insurers offer a safe driver's discount if you go for a certain period without a ticket or accident, usually 3 years.
  4. Renewal discount: If you have been with an insurer for a long time, they might offer a renewal discount to get you to continue your current coverage.
  5. Discounts for students: If you are a student, unmarried, under the age of 25 years, and you meet the grade requirements, you may get cheap auto insurance.
  6. Choosing a higher deductible: If you choose a higher deductable, your premium payment will be less, but you will have to pay more if you have an accident.
  7. Type of car: The type of vehicle you buy is a factor your insurance agent uses to determine your auto insurance premium rate. The quotes you get for an expensive car will be higher than for a more standard car. The age and size of your car also determines how high your premium is.
  8. Good credit history: Maintaining good credit history may also entitle you to certain discounts.
  9. Low mileage discounts: Some companies may also offer certain percentage of discounts to individuals who drive less than the average number of miles each year. If you are one of them, then you may also get this privilege.
Apart from the above, there are other ways to maximize your auto insurance benefits while minimizing costs. Learn more...

Will your premium go up after you file a claim?

Every insurer will increase the amount of your premium if you are involved in an accident. The increase is decided by the auto insurance company you purchased your policy from.

If you have a bad driving record, your motor insurance company may refuse to renew your policy and varies from one company to another. Accidents caused by drunk driving are more likely to result in a non-renewal of your policy.

If you decide not to inform your insurer about a minor accident, it may cause problems later. If you get sued by the other driver, your auto policy provider might not cover you because of the time lapse. Even if the claim is not refused, it will be harder to find evidence to support your case.

No one can predict when they will get into an accident. Investing in automobile insurance, protects you and your family during accidents and from losing your license for driving without insurance.

Related readings

Useful auto insurance letter

I've heard of so many automobile insurance claims that affected the insured's premiums. Is it possible for anyone to guide me regarding the major auto claim factors that affect our premiums?

Total Comments: 154

Posted: Mon Dec 21, 2009 01:28 pm Post Subject:

Not really, because your situation is fact dependent. Your agent would be a better source for this information.

Posted: Tue Dec 22, 2009 12:20 am Post Subject:

In general terms, if you have a history of making automobile insurance claims then you will present a higher risk to the insurer and your premiums will reflect this.

Likewise if you have a bad driving record, a theft prone type of vehicle, are of a certain age group and various other factors.

Posted: Wed Dec 23, 2009 06:47 am Post Subject:

I guess your driving records affect your claims the most. Your premiums are determined by a rating chart which is regulated by your state. Some country wide laws may also be applicable towards your rates.

Posted: Thu Dec 24, 2009 06:03 am Post Subject:

Some country wide laws may also be applicable towards your rates.

Mostly rating systems across all states would determine premiums on an 'allocation' basis. There are several factors which may lead to premium hikes and one of them is your driving record. Usually the carrier allocates the repair charges of your vehicle to your auto insurance premium. Whenever you meet with an accident or file a claim then only this cost increases.

Posted: Thu Dec 24, 2009 11:04 am Post Subject: insurance

Your driving record, how LONG you have been driving, etc: ALL of these things (I believe..) determines what your payments would be. Also....I've heard some say that, to determine what your premiums would be, they check your Credit, as well. However........I'm not sure if this is correct information. Can someone 'shed some light' on that?

Posted: Sun Dec 27, 2009 12:51 pm Post Subject:

The OP says,

Major auto insurance claim factors affecting our premiums

So I would assume, they have ins. and want to know what (re: auto accidents) affect premium.

All premium increases are state dependent, but most are the same. First off NO premium can be raised until the policy term over, and new term is billed. Most carriers have a 'pay out' amount for a chargeable (at fault) accident that will raise your premiuim. IE over 500 paid on a chargeable accident will generate a rate increase. How much? well that depends...some if you have a safe driver discount, you will only lose that for the first one. Others may differ some.

Posted: Mon Dec 28, 2009 09:35 pm Post Subject:

I will chime in and state the obvious: excellent driving record and no accidents with (depending on state/company) good credit rating = cheap rates.

Bad driving record and chargeable accidents = much higher rates.

Heck, even just a bad credit rating = higher rates.

The moral of the story: keep to the speed limit, don't tailgate, stay off the cell phones and be accident free, and the insurance companies will love you. Well, at least you're giving them the opportunity to woo you. :)

Posted: Tue Dec 29, 2009 09:22 am Post Subject:

See, the costs have to be allocated upon the insured's chances of filing a claim. Premiums structures are developed in such a way as to help the safer drivers. Different factors like the salary of the adjuster and the other costs associated with the claims dept. have to be allocated properly. It's not just about the repair cost of the vehicle. Roddick

Posted: Wed Dec 30, 2009 07:08 am Post Subject:

The volume of insurance frauds that are being committed now-a-days would also affect our insurance costs to some extent. The volume of staged accidents have increased during the past few years. Scam drivers would have an opportunity to collect twice- first they'd collect from the collision insurance and then for the physical injuries.

Posted: Thu Dec 31, 2009 07:19 am Post Subject:

Irrespective of whether it's a staged accident or not, the con artist will move to a different location with his car. Once there, he'd cause more damages to the car only to claim for more damages. He'd pretend as if all the damages have been caused by the accident.

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