Last Updated on January 4, 2021
Are you willing to buy a car…? Or do you already own a car…? If your answer is “yes”, then, of course, you might have met this friend “Auto insurance”.
Gap insurance, car insurance are similar words for auto insurance. The reason why the people called it as a friend is, when you have insurance with you it will help you to overcome some troubles that you come across.
Auto insurance protects the policyholder against financial loss in an accident or anything related to the car. This insurance provides property coverage (for the damage to the car), Liability coverage and also medical coverage. Normally policies are purchased for six months’ time period or for one year. And that policy will clearly specify the amount of coverage.
An Insurance Policy Is a Contract
An insurance policy is a contract and it is between the company and the policyholder and it describes the insurance coverage and shows how the premium was determined. Rates may vary from each other. Mostly among locations, among insurance companies, and even among all the policyholders who use the same insurance policies from one company in the same area.
Liability coverage will be the most expensive one and it will represent about 60 percent of the total premium on average. The cost of comprehensive insurance and also the cost of collision will represent only 30 percent of the total premium. But these details may vary with the car. The cost of collision insurance represents a higher proportion of the total premium for new cars than used or old cars.
The exhibit will identify your potential financial damage related to your car in an accident, related to other cars or the other property in an accident and also related to your car when not in an accident. Normally, the claims on collision and property damage will account for about 34 percent of the expenses. Twelve percent of the total expenses may be charged by the lawyers as lawyer fees.
As mentioned above your insurance premium will depend on the Insurance Company that you selected. So, you may get a chance to reduce your auto insurance premium by taking quotations from various insurance companies. Therefore, remember to obtain several quotes before you select an insurance company.
When you come across any problem with the coverage and if you want to talk with someone you have the facility to contact them directly. A comparison between quotes may help you to decide which company you should contact.
Factors that Affect Your?Auto Insurance Premium
The factors will be the characteristics of your car including, value of your car, repair record of your car, and your personal characteristics including your age, your mileage (if you drive less than 10,000 miles per year you may qualify for the low-mileage groups which will arrange you to pay a low premium), your driving record, your location, your driver training, your school performance (insurance companies may recognize that good students also appear to be safer drivers and they may charge low premium rates from them.)