Understanding Insurance Vernacular - Minimums, Liability, Comprehensive, and Full Coverage

“Earth, wind, air, and fire.” “Emceeing, DJing, breaking, and graff.” “Liability, medical payments, uninsured motorists, and damage to your auto.” Somehow the four elements of car insurance don’t have the same ring to them as the four elements of hip-hop. Then again, maybe people would learn more about car insurance if there were a show like “Wild & Out” for insurance agents. I can see it now: Two insurance men take the stage and “battle” to give the judge the best rates. Surely, the essential thing for any freestyle insurance champion would be to understand the four elements, as outlined below.

Part A - Liability Coverage

The first and most important car insurance coverage is liability. Liability coverage protects the “insured” against lawsuits from people and property injured by his or her actions. For example, if you ran a red light and hit an old lady in a Cadillac, your liability coverage would pay for the lady’s bodily injuries, as well as the property damage to her Caddy.

There are normally “split limits” to liability coverage. For example, you could have liability coverage with a bodily injury limit of $100,000 / $300,000; and a property damage limit of $50,000. The $100,000 of bodily injury refers to the maximum amount payable to each person, and the $300,000 is for each accident. The property damage limit is for each accident. So, if the old lady with the Cadlliac had three passengers, and she and each of the passengers suffered $150,000 worth of damages, your car insurance company would only pay for the first $100,000 on three of the victims. You would be responsible for all of the rest.
Part B - Medical Payments Coverage

While liability coverage deals with other people, medical payments coverage is for you. It involves an agreement by the insurance company to pay medical, surgical, ambulance, hospital, nursing, and funeral expenses, up to a specified limit. Also unlike liability coverage, medical payments coverage protects the insured and his or her family members without regard to fault.

Part C - Uninsured Motorists Coverage

This coverage insures against losses caused by uninsured or unidentified motorists. For example, if instead it was the old lady who ran the light in her Caddy and hit you, and come to find out, Grandma was uninsured and living on Social Security, uninsured motorists (UM) coverage would be necessary in order to collect damages from your own insurance. UM also protects you against the Halle Berrys of the world who cause an accident and flee the scene of the crime. If hit-and-run perps are never identified, who can you hold accountable? No one. Which is why UM coverage kicks in.

Part D - Coverage for Damage to Your Automobile

This is the coverage that protects you against damages sustained to your own car. It is split into two categories: Collision coverage, and other-than-collision coverage (also known as “OTC” or “comprehensive” coverage). Obviously, collision coverage insures against collisions (duh!). OTC covers loss due to fire, theft, explosion, earthquake, flood, vandalism, and animal accidents (which are literally “collisions,” but not in the world of insurance).

Epilogue - You’d Better Shop Around!

Far too many people fail to view car insurance as a financial product, and instead, view it simply as something that they have to have, by law. People with this view are essentially throwing their premium dollars out the window. Since you have to have car insurance, why not insist on the best value for your money? Not having enough coverage is one sin, but having too much (or the wrong kinds) is almost equally bad. The best thing you can do to ensure you’re getting value for your monthly premiums is to shop around, and with the internet, it has never been easier. Get informed on the ins-and-outs of car insurance terminology and decide on what types of coverages (and what limits) make sense for you. A small investment of time and energy can save you thousands of dollars over the course of a lifetime.

Cheap Auto Insurance

There are many factors which could affect your automobile insurance costs. Some of the more obvious factors are:

• Sexual category and Age: Teenage male motorists are generally the most expensive to get insurance for, especially if they have poor driving records.

• Driving record: Speeding tickets, accidents, charges for driving under the influence of alcohol or drugs – all these things add up and cause higher online automobile insurance costs.

• Miscellaneous Discounts: If you have a good driving record, your car is equipped with the mandatory safety features, you have low mileage on your car, you are an elderly person, or if you are in the armed forces then you may be entitled to discounts on your car insurance.

However, did you know that the place you live and the vehicle that you drive may also affect your automobile insurance costs?

Location, Location, Location

It’s true; online automobile insurance costs in rural areas have been found to be cheaper than those in larger urban areas. Accidents will occur more frequently in big cities, due to the large number of motor vehicles on the highway. Some states have higher insurance costs when compared to other states based on the ratio of claims filed.

The cost would be higher for settlement of claims in certain areas, and your premium charges might go up for this very reason. You require more money to repair or replace expensive vehicles, and well-off urban communities would be paying higher online automobile insurance costs.

Go for a cheap, reliable vehicle. How your vehicle holds out during an accident is quite essential to online automobile insurance companies. Think about it, the more an automobile costs to restore following an accident, then the more online automobile insurance companies will have to pay. It’s safe to assume that insurance costs will be higher for cars that get into more accidents, sustain more damage, and also cause more harm to passengers in accidents. Also, automobiles such as sports cars and certain SUVs that have a low crash resistance will have higher insurance costs.

Another important factor is whether or not your automobile is on the list of those often targeted by thieves. Non-profit organizations track the most commonly stolen vehicles. Fundamentally, almost all automobiles will be expensive to insure. Be certain to confirm the insurance costs of a particular automobile before buying it.

If someone has stolen your car, be sure to contact the police right away. Make sure that you have information like the year you purchased the car, model and make of your car, your license plate number, the VIN (vehicle identification number), the place where your car was stolen and the time. Next, you must inform your automobile insurance company about the theft of your car. The quicker you do this, the more promptly they can get started on processing your claim.

In addition to your personal information, other aspects about your car and where you live tend to have an impact on the car insurance prices. Make sure that you compare insurance costs prior to purchasing an insurance plan, and find out which one best suits you, your car, and also your region. Everybody would like to receive a discount on their online car insurance but we might be unsure how to get the best deal. Regardless of how many automobile insurance quotes you may have, until you have done your homework there is every possibility that you may miss out on potential savings simply because you didn’t make a thorough comparison of car insurance policies or look around for discounts.

First, get as many online automobile insurance quotes as you can, and with the help of the internet this process has become quite simple. There are several sites, from brokers, resellers and insurers which you can look at to compare online automobile insurance quotes and to determine whether you are eligible for automobile insurance. Shopping around for automobile insurance online is possibly the best way of lowering your insurance rate, however, there are other ways of lowering your insurance rate:

Keeping a good driving record may not be an option at the moment because of past misdemeanours, however, these misdemeanours will disappear from your driving record over time and to get a low car insurance premium in the future, you should try to change your driving habits. If you have a good claims history it will make you a low risk motorist. To avoid making unnecessary claims in order to reduce your car insurance premium; do not file small claims unless the amount is significant.

Automobile insurance companies take a look at credit records to find out how responsible the driver is. Make sure that you pay your bills on time. Changing an automobile insurance plan can have an impact on your credit record. If you find a new online automobile insurance plan, make sure to terminate the old one. If you fail to do so, your previous insurance company may file it as a bill which is unpaid.

Sports cars, SUVs, and expensive foreign cars may get the attention of insurance companies. Also, make sure that your car has plenty of safety features like seat-belts, air-bags, together with antitheft devices like car alarms and antilock brakes.

The more someone drives, the higher the chance of an accident. If the distance you travel is lower than the annual predetermined average number of miles, below ten thousand miles, then you will pay less. For instance, some companies might give discounts to customers who are ready to carpool. Find out if the company offers any group car insurance plans in your area, or if you can join a specialized group policy.