Understanding car insurance coverage, claims, premiums and terminology can be confusing at times. In addition motorists may have wrong information about what is what. It is a good idea to get to the bottom of your queries when you have them in your mind. These questions may come when you are looking at policy documents or arranging a renewal.
Drivers should not wait until they need answers to their questions desperately following an accident. The answers should be sought after well before. Also, reading a little on general topics will allow them to evaluate their needs better. Here are some of the commonly asked auto insurance questions and answers to them.
How much premiums would go up if you had a claim?
This is an open ended question and a lot more information is needed to know roughly how much car insurance rates will increase. First of all, companies will determine if you were at fault in an accident. If you are your insurer will probably pay the damages third party drivers and people suffered as a result. In that case, you are most definitely going to see increases in your premiums at renewal.
However, if you were totally innocent in the incident and your insurer can recover the costs from third party insurers you may not suffer rate increases. Sometimes, you may be innocent but your insurer will still have to pay and they cannot recover the costs from anywhere else. These will go down as a claim and you will see increased rates. For example, it is not your fault that your car is stolen or had storm damage but these still costs money to your insurer.
How much premium hike will be applied is totally dependent on several factors. The most important one would be your driving history. A young man having an accident within two months of buying his first policy will see a huge jump at renewal. However, a loyal customer who has not had any incidents for years may see a slight increase. Again the number of previous claims will be important as well as the total damages caused.
What is an ideal coverage?
There is no such thing as ideal coverage that can apply to everybody. The good place to look for answers to this question is independent brokers. They will have to go through all your personal, financial and vehicle usage details before they can answer such questions. So, if you cannot figure out what is the best policy coverage for you seeing a broker would be advisable.
If you want to work it out on your own you need to think about what could happen to your car and while you are driving and your capabilities to handle them. Everyone will have to have the minimum state required liabilities coverage before they can legally drive a car.
Anything above that is up to auto owners. When you have a new automobile you would probably want to insure it properly. This brings us to the next question which is not clear cut again.
What is full coverage?
There are many package policies sold in the market as “full coverage”. Most drivers with a new enough auto like to buy full coverage. Generally it includes four parts; Collision for auto crashes; Comprehensive for other damages to insured vehicles like fire, theft, storm damages and vandalism, excluding collision; of course the third party liabilities; and Uninsured Driver Coverage to pay for the damages caused by drivers who does not have insurance. It is best to answer what else can be included in a full coverage with the next question.
Do most policies include Rental Reimbursement Coverage automatically?
Many people got this wrong and end up paying the rental they arranged while their accident damaged auto is being repaired. Rental Reimbursement Coverage does not get included automatically with many policy packages sold. Especially, when you are looking for cheap policies they may only include the bare bone essentials that may exclude Rental cover.
So, it is best to check this before you agree to buy a policy. If you have already bought one make sure you have the coverage. Otherwise, you can add it and pay the about $50 additional premium. Another question is just coming up relating to this topic.
Can I rent any car while mine is being repaired by the insurance company?
Should you have the Rental cover some of the money you spent will be reimbursed. You should check how much and how long you have coverage for. Usually, you would get about $30 a day for around 30 days. If this is the case any amount you spend over these figures will have to come out of your pocket. You need to check with your insurer before picking up a car. Some repair garages may offer courtesy car should your policy include rental cover. It is worth checking.
How will traffic violation tickets affect my premiums?
Generally tickets that have gone on your driving licence records will be seen by the auto insurer at some point. You are also supposed to tell them if you have a traffic court conviction or point deduction from your licence. Depending on the conviction or points deduction you will see some rate increases. Usually the first speeding ticket can cost you about ten percent increase. But a DUI conviction can make it impossible to get a decent quote from any reputable insurer.
When can I start getting good driver discounts?
Many people may believe that you need to have a few years clean history before you can qualify for good driver discounts. This is not necessarily true. Companies will start offering you good discounts as soon as you finish your first claim free term. Actually, you are likely to get the large part of the discounts in the early years. After five years you should be able to get the largest good driver discounts that can reach as much as fifty percent with some companies. After that you are unlikely to see much of a chance.
Do I have to change auto insurers when I move to another state?
You will need to re-arrange your vehicle insurance policies when you move out of the state borders. However, if you want to stay with the same insurer they must be licenced in the new state. Companies are required to be licenced in every state they sell insurance. It is worth mentioning that every state has own insurance rules, regulations and minimum liability requirements. Therefore, it is highly advisable to get several quotes before you make your mind up. The company you are with may not be competitive in this part of the country even though they were in your previous state.