Lets Talk about our cars.
Are you a car owner?
How do you see your car? as an asset, your transport, Your favorite thing, your time saver? Your Showoff? Your prideful Toy?
Some persons even take personalization of their cars far enough as to call them Babe or Beast.
How you see your car is how you treat it. How you SEE your car will determine how often you wash it, how your mind drifts when a child or friend with dirty or clumsy feet waltz into into your car, how your mind is uneasy when a friend, wife or kid insists on eating in your car, How you just want to punch that kid for spilling juice on your leather seat, or how you want to end the life of anyone who drives a scratch on its carefully carved frame. Imaging landing a scratch on your new 2023 Mercedes-Benz C-Class.
Insurance is a subject that generally takes me at a shock, I mean there’s literally a scheme that takes responsibility for my carelessness that has probably cost my most priced possession?
So!!! you’re in love with cars just like I am. We both know they’re practically invincible, but hey, auto insurance is still a necessary evil. In this article, we’ll dive into the fascinating world of auto insurance and reluctantly accept the fact that even our beloved cars need protection. The concept of insurance might seem Confusing however, brace yourself for some eye-rolling Simplified insurance knowledge!
Definition Of Auto Insurance
Basically, Auto insurance is a type of insurance that protects you financially in the event of a car accident, Car theft or any form of Auto Loss. It can cover the cost of repairs to your car, medical expenses for you and your passengers as it applies, and even legal fees, hence I would say Auto insurance is a crucial aspect of vehicle ownership.
Types Of Auto Insurance
1. Collision Coverage: Let’s face it, accidents happen, and sometimes it’s our fault. Liability coverage is your savior when you crash into someone’s pristine vehicle and can’t escape their icy stare. And remember, collision coverage will come to the rescue when you mistake a lamppost for a parking space—don’t worry, it happens to the best of us
2. Liability Coverage: Imagine now that its you who has planted a scratch on another Individuals car, and imagine this one’s some Car Crackhead(Those that would go to the shower with their cars if they’re given the chance), well this type of insurance takes care of the persons car FOR YOU.
3. Comprehensive Coverage: Did your car just get stolen, or you’re just not sure where you parked it after a few drinks? comprehensive coverage covers damages to your vehicle caused by incidents other than collisions, such as theft, vandalism, or natural disasters. Listed are some of the damages the Comprehensive coverage addresses under the “Act Of God” Class.
- Theft or attempted theft of your vehicle.
- Damage caused by vandalism or malicious acts.
- Fire and explosions.
- Natural disasters like hurricanes, tornadoes, earthquakes, and floods.
- Falling objects, such as tree branches or debris.
- Damage from hitting an animal, such as a deer.
- Glass damage, such as a cracked windshield (may have a separate deductible).
4. Personal Injury Protection (PIP) or Medical Payments Coverage: In situations of accidents, this type of coverage practically pays the hospital bills for you and your passengers. This coverage provides financial assistance for medical expenses resulting from injuries sustained in an accident, regardless of who is at fault. While these two might seem similar in some ways, there are a few key differences between PIP and Medical Payments Coverage. Say you’re in an accident with someone without an insurance, this coverage protects you.
Difference Between Personal Injury Protection(PIP) and Medical Payment Coverage
Personal Injury Protection
Otherwise called PIP.
- PIP is a type of insurance coverage that is required in some states and optional in others.
- PIP typically covers a broader range of expenses than Medical Payments Coverage.
- PIP coverage applies to injuries sustained by the policyholder and any passengers in their vehicle, regardless of fault.
- PIP benefits are usually paid directly to the injured party, regardless of whether they have health insurance or not.
Medical Payments Coverage
Otherwise called MedPay
- MedPay is an optional coverage available in many states.
- MedPay is more limited in scope compared to PIP. It generally covers only medical and funeral expenses resulting from an accident.
- MedPay coverage is not dependent on fault. It can provide benefits to the policyholder and passengers in their vehicle, as well as pedestrians or cyclists involved in the accident.
- MedPay benefits are typically paid directly to medical providers.
Factors Affecting Insurance Premiums
HAVE YOU DECIDED TO GET INSURED? Dont be in a hurry, consider these factors before you jump right in.
First, Insurance premiums, the bane of every car lover’s existence!. A pre
Your driving record plays a crucial role here. If you have more tickets and accidents than trophies on your shelf, expect those premiums to skyrocket.
- Car Worth: And lets not forget about that fancy sports car of yours—it’s a magnet for high premiums. I’m saying, the higher up the ranks your car is, the more expensive it is to Insure. You can compare vehicles and see the premium differences by using an online tools like NerdWallet.
- Your Location can affect the cost of your insurance as the company makes it a priority to enquire about the population density and crime rate of your residential address to analytically ascertain the possibilities of a claim. Hence, areas with higher population densities, more traffic congestion, or higher rates of accidents and theft may have higher premiums compared to areas with lower risk. Regions prone to severe weather conditions or natural disasters, such as hurricanes, earthquakes, or flooding, may also experience higher insurance premiums due to the increased risk of vehicle damage or loss.
- Credit History: Insurance companies go the extra-mile of confirming your credit score and driving portfolio. another spoiler, Insurers use a credit-based insurance score, to determine the likelihood you’ll file a claim. A credit-based insurance score is determined by factors like payment history and your outstanding debts if you happen to have any.
- Age: is also a determinant of how much your insurance will cost. Teenage drivers for instance have higher car insurance quotes on average than any other age group. Given that statistical data has shown that age is correlated with risk, Insurance companies rely on actuarial science and historical data to assess risk and set premiums accordingly. Some of the reasons why age is a factor in the case of auto insurance is Inexperience with wheels, Risk-taking behavior which can involve exceeding the speed-limits or driving under the influence of alcohol or drugs.
also put into consideration topics like Exclusions and Limitations, Policy Period and Policy Renewal when you are searching for rates.
Exclusions and limitations are terms used in insurance policies to specify certain conditions, risks, or circumstances that are not covered or have limited coverage under the policy. These provisions outline the boundaries of the insurance coverage and clarify what the insurer will not be responsible for in terms of claims or losses. Exclusions define what risks are not covered by the insurance policy while Limitations are rules that insurance companies use to protect themselves from big financial risks in certain situations
Exclusions
- Exclusions are specific situations, events, or conditions explicitly listed in the insurance policy where coverage is not provided. These exclusions can vary depending on the type of insurance policy and can range from general exclusions applicable to most policies (e.g., intentional acts, war, nuclear events) to more specific exclusions tailored to the particular risks associated with the policy (e.g., pre-existing medical conditions, specific types of damage or losses)
Limitations
- Limitations refer to restrictions or caps on coverage for certain scenarios or types of losses. They may define maximum benefit amounts, time limitations, or other criteria that limit the extent of coverage provided by the insurance policy. Limitations can apply to various aspects of the policy, such as coverage limits for specific types of claims, geographical restrictions, coverage periods, or conditions for reimbursement
Another Question would be how do i get my car Insured? I would outline a few basic steps and credentials needed to secure an auto insurance.
10 Things To Check Before Applying For Auto Insurance
Here are 10 easy to understand steps that will help you figure out where to start and how to successfully bag the best insurance rate with best of benefits.
You can get an Insurance package from a company directly, online, or through the aid of an Agent. None of these steps are wrong but you can go wrong in so many ways with these steps. Getting an insurance usually should involve a lot of research and hard work. Almost as if you are working on a project and you need every information that can be made available to you either via the web, family or friend.
These steps will help you understand what’s required to get an insurance. While most of it is determined by the insurer (The Insurance Company), a lot of other things will also be under your control.
Lets get to it!!
- Get you credentials ready:
When embarking on this journey, it is essential to ensure that you have the necessary documentation in place. The specific document requirements may vary among different insurance companies; however, there are generally standard credentials that are commonly requested. These credentials serve multiple purposes, including assisting the insurance company, assessing your eligibility, and determining the appropriate premium for your coverage. - Personal Information:
Insurers (Insurance Companies) typically require personal information such as your full name, date of birth, and contact details (address, phone number, email). This is generally to verify the identity of the insured - Form Of Identification:
You will need to provide a valid form of identification, such as a driver’s license, passport, or national identification card. this is also aimed at verifying your identity and ensure that the insurance policy is not issued to a swindler. - Auto Details:
You’re seeking auto or property insurance in all? Insurers will need specific details about the vehicle(s) or property being insured. For auto insurance, this includes information on your car such as the make, model, year, VIN (Vehicle Identification Number), usage type (Personal or commercial) and price. For property insurance, you’ll need to provide the property address, description, and details about its construction and occupancy. It is important to be thorough with the data you are providing knowing it will affect the premium you’ll pay for coverage. so what is your car worth? Let us know in the comment section. - Traffic Violation and Accident History:
Make no mistake, this information is available to the insurer. For auto insurance, insurers typically request information about your driving history, including details of any accidents and traffic violations. This information helps assess the level of risk associated with insuring you as a driver and determines the premium you’ll pay for coverage. We dont want to Insure a drunk who will always mistake a mistake a lamppost for a parking space. - Financial Information:
Imagine being asked for a loan by a friend you are sure is not able to pay back due to his financial status, you would be reluctant to give aid. In some cases, insurers may request financial information to evaluate your eligibility for certain types of insurance coverage, such as life insurance or high-value property insurance. This may include details about your income, assets, and liabilities. Financial information helps insurers determine the level of risk and coverage limits appropriate for your situation. YES they also want to reduce risk as much as possible. - Checks For Underlying Health Condition:
For health or life insurance, insurers may require medical information, such as pre-existing conditions, medical history, or current medications all tailored onto avoiding giving the wrong person insurance. To determine the level of risk associated with insuring your health or life and helps calculate the premiums accordingly is surely not to be taken lightly. Conversely, your health is also a determinant to any form of insurance you get, including Auto. - Coverage History:
If you have previous insurance coverage, insurers will and not ‘may’ request information about your prior coverage history, including the name of the previous insurer, policy details, and claims history. This information helps insurers assess your insurance track record and will not ‘may’ impact the rates or coverage options available to you. - Decide Between Direct Or Indirect Insurance:
Next comes The decision to either buy insurance through an agent, or directly from the insurance company. Either of these has its pros and cons.
Direct Insurance:
Insurance Directly from the Insurance company: To get insurance without a Brooker would require a lot of research. You will get insurance online by looking up your insurer on their website or over the phone, How? Call the customer service or sales department of the insurance provider you have chosen. Their contact numbers are usually found on their website or through a quick online search. Follow the prompts or speak to a representative to initiate the insurance application process.
With Direct insurance, there is no need to get a third party in the equation. Remember those guys on fairly expensive suits convincing you to purchase insurance, you can decide to keep their pestering and annoying speeches off your ears. It comes with its cons too of course but cutting out the Agent fee, this makes your process to getting an insurance less expensive. One serious con you should not ignore is the fact that filing claims can be tricky without the help of a designated agent.
Indirect Insurance:
Two things are involved here, you are either getting your Insurance through a “captive”. Captive agents work exclusively for a single insurance company and act as your main point of contact with the company. Having in mind that this will make your work in this process a lot easier, the one con that strikes hard is the fact that these Agents get commission based on the insurance you get hence this will compel some to pitch pricier policies not minding other important factors that might be unique to your needs and situation at the time. Plus they will keep the mention of other companies from their lips even when they know they offer better rates.
The other thing Involved is getting from an Independent Brooker or Agent. These ones are not tied to just one insurance company. They can offer you a variety of policies to choose from. One too many Insurance companies use these mediums to sell insurance too. Both agent and broker earn commission from their sale, but an agent will represent the insurance company they are affiliated with, while broker will represent the policy holder. one con also would be the fact that they will try to sell you on policy features you don’t need considering that they also work on commission.
10. The Devil You Know:
Lastly, this is more of an advice to precautionary measures than a step. Its is ideal to consider a list of famous Insurance companies that is famous in the market like Statefarm, Allstate or Geico but its best to compare quotes and see which one offers a sweeter deal. So do a research and pick out what you need and not what you want.
In conclusion, auto insurance isn’t just a dry and serious topic—it’s your coverage for the road! So, why wait? Don’t let your insurance game be weak as a veggie. Take action now and find the perfect auto insurance policy that will have your back.
Remember, accidents don’t care if you’re the next Dominic Toreto or a parallel parking prodigy.
