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Auto Insurance Basics - Ways To Save On Your Coverage
Auto insurance is one of those things that is just a “fact of life”. It’s important, it’s required, IT’S THE LAW! Significant changes to auto insurance laws are constantly being made at the state and federal level. These changes directly affect auto insurance providers and the drivers that they insure.
It is only fitting that auto insurance policies and procedures differ from state to state. This is because each state has it’s own set of challenges and issues that relate to motorists and their driving patterns. For example, tons of California drivers have to regularly contend with the 405-freeway. This heavily traveled freeway is part of the California Freeway and Expressway System and is reported as being the busiest and most congested freeway in the United States! Obviously, certain laws that are applicable in California would not even be necessary in a small city, with much less traveled streets and roads. It stands to reason, the more motorists on the road, the more opportunities exist for collisions, and other related auto incidents. This in turn makes it necessary for not just more insurance laws, but specific laws that address the needs of each locality.
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Whether auto insurance is being purchased for a teenage driver, a middle-aged driver, or a more seasoned driver, everyone wants to pay the lowest down payment possible. This is also true about paying the lowest monthly auto insurance premiums. Depending on the insured, the state of residence, and the circumstances, overall auto insurance can tend to be high. So much so, you can barely afford to pay your auto insurance AND put gas in your car the same month. Thousands of insured motorists continue to pay high monthly auto premiums, only to have their vehicles sit parked in the driveway!
When purchasing auto insurance, many people are attracted to the ideal of a low down payment. Our money is so stretched as it is, most people want to hold on to it as long as they can! However, it’s important to keep in mind that a low down payment will affect your regular monthly premiums. You may save a little when you first start the policy, but you are going to be paying more than you have to, EVERY single month. Generally, you end up paying more in the long run.
On the other hand, if you go on and make a larger payment when you first get your policy, you could end up actually saving money. So while an insurance provider may require a large down payment, your regular monthly premium will generally be lower. If your cash situation will allow you to pay a little more down when buying auto insurance, don’t grumble about it. Just pay it! You’ll be happy you can hold on to those few extra bucks each month.
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Young People Behind The Wheel
If you’re a middle-aged adult and you think your insurance premiums are too high, you must not have had to insure a teenager or young adult recently! Auto insurance rates have definitely skyrocketed, but especially so for teenage drivers. The fact is, for new and inexperienced drivers, the costs can be exorbitant!
The rates that are already excessive can increase even more for drivers who fall into a demographic group that insurance companies view as high risk. One example of such a group is: young men between the ages of 16 and 21 years old. They are actually considered to be the worst drivers, at least in terms of frequency of accidents, and quite frankly, the Insurance companies don't view teenage girls that much differently. It may seem discriminatory, but teenagers and young adult drivers just get a bad rap, all the way around!
To these young people, it might appear unfair, but the truth of the matter is, there are statistics that show that young drivers are more likely to be involved in an accident than any other group. Statistics such as these can be credited for the skyrocketing insurance premiums for teen and young adult drivers.
So what should you do if you’re a parent, or someone interested in purchasing auto insurance for a young driver, and what things can help to keep your auto insurance costs lower?
If you’re reading this information, you probably have already purchased a vehicle for your teenage new driver, but if you haven’t, here are some things to keep in mind before you buy a car for a young person. Even if you are in a position to purchase a brand new car, especially a muscle car, SUV, or high end car, like most young people want to drive. While money may or may not be a factor in your purchase, keep in mind, the type of vehicle is directly connected to the type of insurance rates you will be paying. That being said, let your teen drive a car that will not encourage recklessness.
Since the insurance companies read the statistics, and make generalizations about types of drivers, generally speaking, if a teenager is driving a Chevy Corvette, they are more likely to speed and drive recklessly. The temptation to show off and perform illegal traffic maneuvers is stronger in this type of car, then something like a Ford Focus. Because the insurance companies realize this, the auto premiums for teenagers who drive sportier cars is going to be much higher than for those driving other kinds of vehicles. It is wise to keep this point in mind, regardless of what type of car you decide to buy. Doing so may save you thousands on the vehicle of choice, as well as on the monthly insurance premiums.
Compare Insurance Coverage
When shopping for automobile insurance, it is very important that you don’t simply stop at the first quote you get from an insurance company. For the best rate, it is necessary to shop around. One good ideal is to go with an experienced Licensed Broker. Because they work with multiple companies, they are in a better position to get you the best rates for your money. They actually do the shopping around for you, and they even have broker secrets that you will be able to monopolize on. In the long run, you could end up saving hundreds, and sometimes thousands of dollars.
Insurance Is Not Just Coverage
When it comes to insuring young drivers on the road, it goes beyond the kind of car they are driving, and the type of coverage they possess. It is also about (among other things) how they drive, who rides with them. Many young drivers end up grounded or with their licenses taken, through no direct fault of their own. This is because they failed to be mindful about certain driving related issues. To help your young driver stay on track, regularly communicate with them, and make sure they know and understand your rules and restrictions, when it comes to how they are allowed to drive, who they are allowed to drive, and where they are allowed to drive. Keeping these lines of communication open will help to insure your young person on the road. Just think of it as additional coverage
How Much Coverage Is Really Necessary
Since today’s economy is in a terrible slump, people are finding ways to trim the fat wherever they possibly can. Some expenses that are not really necessities are being reduced or eliminated altogether. While many things can be scaled down to accommodate a tight budget, should auto insurance be added to the long list of non essentials? When it comes to automobile coverage, just how much is really necessary?
Most people mistakenly think if they have liability auto coverage, at least that covers the basics. They are under the misguided impression that liability auto coverage will at least take care of the other driver if there’s ever an accident. In actuality, even if you have liability coverage, it may only partially cover the other vehicle and driver. That doesn’t necessarily take into account the complete amount of damage to their vehicle, or the total amount of passengers (if any) in the other vehicle. So getting just liability auto insurance still may not be enough coverage! For a little more insight on this, let’s consider the state of California.
A Look At California Laws
The state of California changed the way the Department of Motor Vehicles verifies automobile insurance for privately owned vehicles. The Vehicle Financial Responsibility Law of 2006 requires California insurance companies to electronically report private-use vehicle insurance
information to DMV. Law enforcement, as well as court personnel, all have electronic access to DMV’s insurance records.
The changes were implemented to ensure that vehicles traveling on California roads have at least the minimum requirement of insurance coverage. This would provide financial responsibility for damages or injuries that may result from traffic accidents, regardless of fault. The lawmakers hoped this would also help to remove uninsured vehicles from the roads.
While liability insurance is supposed to compensate the other driver for personal injury or property damages, the truth is, sometimes it is not enough to cover all the expenses.
Pay A Little Extra And Get A Lot More
Some drivers decide it makes sense to pay a little extra and get comprehensive auto insurance. Doing so will get you a lot more coverage on your auto policy, and can really be a smart choice. Unlike liability insurance, comprehensive insurance does provide for some protection for yourself and your own car. If you drive a more seasoned (nice expression for beat up) automobile, you may not be too concerned about any damage to your own car, but keep in mind, not only can simple liability fail to cover your medical expenses, if any, but, as previously stated, it may not even completely cover the other driver’s expenses. For example, an average liability policy may only cover up to $10,000 in damages to the other party. If you incur damages that exceed that amount (which is highly likely), you’re out of pocket for the rest of the expense. Additionally, you will have to cover your own damages and expenses to you, your car, and passengers (if applicable).
Paying a little extra for additional auto insurance is not always that much more expensive than basic liability coverage. Some individuals learn to adjust their expenses so they can save enough money to pay a little extra for auto coverage. Overall, this can end up saving them a lot more in the long run.
Your monthly auto insurance premiums are affected by a number of variables including: your yearly deductible, amount of coverage, the city and state you live in, and other issues. Any one, of these things can affect your monthly auto insurance premiums, as well as the amount you initially pay to get started. if saving a little money is prompting you to purchase only liability insurance, you may want to re-evaluate that decision and choose another option.
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