Auto Car Insurance

Managing Your Risks
Americans own more cars per capita than any other nation. Automobiles are the most dangerous property you own and can subject you to a variety of risks. With just one accident, you can find yourself involved in lawsuits, death, major medical expenses, and extreme property damage. We do not think of driving as exposing us to all of these risks, but it does. These risks are what make it so important that we have taken the time to set up a thorough program to prevent excessive financial losses should a serious auto accident occur.
Automobile insurance is complicated and a responsible driver should be certain that he has adequate coverage to protect him and his family in the event of an accident. Premiums can be very high depending on many variables including the driving record of the owner and the make and model car that is being insured. When considering the purchase of a specific make and model, have your agent check on the insurance rating for the automobile of your choice. There can be a very large difference in insurance rates determined by safety testing and repair costs for each model. It may be in your best interest to purchase a different car that can save you money on insurance over the years. Even the owner’s credit rating is instrumental in determining the rates charged. All of these things have to be taken into consideration before purchasing a specific vehicle, if finances are an issue in your budget.
There are many choices to be made when evaluating an automobile policy. You must make a decision about the amount of liability coverage and property damage you want to carry. This coverage pays for the damage you do to other drivers, vehicles, and property. It is important that you carry sufficient amounts to pay for any accident or injuries you may cause. These policies are available in either a single limit or a split limit. With split-limit policies, the first limit applies to injury per person for each accident, while the second limit is the total that will be paid for injuries per accident. The third limit shown refers to the maximum amount the policy will pay for property damage. For example, 50/100/25 translates to $50,000 per person injury limit, $100,000 for injuries per accident, and $25,000 for property damage. With single-limit policies, one total dollar amount is applied to the total claim for a specific accident. The split-limit policy is the most common form available.
In the event of damage to your automobile, your policy provides coverage for repairs under the collision section of the policy. If repair costs exceed the book value of the automobile, the car will be declared “totaled” and you will receive the dollar amount stated as the current value, regardless of the cost of repairs. There are times when people are paying more for the premium for this coverage than they would receive should the car be involved in an accident. For this reason, it pays to check the book value of your car, especially an older one. This can easily be done online and should be checked annually if you are continuing your collision coverage. Many people purchase collision coverage when they buy their car. Years later, the policy continues to renew with the collision coverage still in force and they are actually paying for something which is no longer worthwhile for them.
Collision coverage is sold with “deductibles”, generally ranging from $50 to $1,000. A deductible is the amount you pay towards the loss and then the insurance company pays the balance. When an accident occurs and your car is damaged, you will generally want to have it repaired immediately so that it will be available again as soon as possible. We all depend on our automobiles for transportation to work, school, medical appointments, and family visits. Being without your transportation is very inconvenient. Your collision insurance is available to you immediately after an accident, before “at fault” has been determined. If an investigation results in your being “at fault”, then your policy will have paid for your auto repair, after you have met your deductible. If, however, the other driver is determined to be “at fault”, your insurance company will seek reimbursement from that driver’s insurance company through a system referred to as “subrogation”. If your company is successful in obtaining reimbursement from the other company, you will be refunded the amount of your deductible.
If your car is stolen, or damaged in some manner other than collision, your policy will provide repairs or replacement under the Comprehensive coverage section. This is very similar to the Collision coverage discussed above, because the amount available to you will again be based on the blue book value of your automobile. Repairs will be made up to this dollar value, but not in excess of it. Deductibles also apply to this coverage and you will be required to choose how high you want your deductible to be. Remember, though, that the higher the deductible, the lower the premium cost. You should, however, only choose higher deductibles it you can comfortably afford them in the event of an accident, theft, or other damage to your vehicle.
If you have financed your automobile purchase through a bank or finance company, be aware that they will most likely require that you carry collision and comprehensive coverage on your auto, they will dictate the amount of your deductible, and they will want to be named as the “loss payee” on your policy in the event of a loss. This is a normal practice as they are protecting their investment in your car. They can be removed from the policy and deductibles adjusted, after the loan has been paid in full.