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5 Helpful Tips for Automobile Insurance Coverage and Knowing your Rights

5 Helpful Tips for Automobile Insurance Coverage and Knowing your Rights

Insurance premiums are often based on the price of the vehicle due to the replacement cost if it's totaled or stolen. This also plays into how expensive parts, labor and auto repair are for that particular car make. Insurance companies tend to set rates based on their own experience. If a certain company has experienced more collision or theft claims on a certain type of vehicle chances are they are going to charge a higher premium than an alternate company.

Who You Are Affects What You Pay:

Demographics play a large role in insurance premiums, this being your age, gender, and driving record. Statistics have proven that males under the age of 25 years typically pay higher rates than women of the same age. Married men pay less than single men.

Where you live also affects your premium. Urban areas or popular cities, dense with people and heavier traffic pay higher rates than rural areas. Many states also set rates based off of zip codes and major cities, i.e. Chicago, Atlanta, or Miami.

Know the Basics:


Even though you're only purchasing a single policy to cover a specific vehicle it's important to understand the different components that make up the final cost.

Bodily Injury Liability: covers injury and death claims against you. This may include legal costs if your car injures or kills someone.

Property Damage Liability: covers claims for property that is damaged by your car in an accident. This is required by most of the United States because it protects the other party.

Uninsured Motorist Protection: covers injuries caused to you or the other occupants of your car by uninsured or hit-and-run drivers.

Collision Coverage: covers damage to your car up to its book value, but it is important to understand that many auto-insurance companies do not use the standard Kelley Blue Book and can use their own proprietary list of car values. Find a trustworthy auto repair.

Know What You Need:

A driver should never be underinsured, but there are a lot of coverage additions that may not benefit every driver and can end up costing more than it's worth. Different states have different requirements when it comes to liability coverage and if it's possible to pay more than the minimum required it isn't a bad idea. Do the research. Although it seems common knowledge the more income and assets you have the more insurance you need, many people may not consider an umbrella policy to protect them from a major lawsuit or to protect their homes in case of an accident, even an auto accident. Take advantage of online quotes and online discounts.

Take Steps to Reduce Your Premium:


There are areas where you have zero control of your insurance premium, but there are steps you can take to keep costs down.

Drive less. Take public transportation when and if you can or try carpooling.

Take advantage of discounts. Many insurance companies have good driver discounts, vehicle safety feature discounts and discounts for non-smokers and drinkers.

Shop around. Just because you've initiated a policy with an insurance provider doesn't mean you have to stay. You can cancel your policy and move to another provider or you can renew and receive a lower rate.

Be a good, safe, and defensive driver. Avoiding accidents and being attentive and proactive on the road will help keep you the "safest" you can be.

Good credit pays. More often than not companies are looking at individual policy holder's credit score. Your new rates can be determined by your credit history.

It's important to understand what you're paying for, what you need and how you can get the most for your money when it comes to insurance. Insurance policies and coverage are advantageous for drivers especially if you get into an accident. A good policy can help you pay for collision repair or auto repair, but knowing your full rights and details can help you in the selection process.

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