What Does Your Car Insurance Really Cover?

Deciphering car insurance coverageCar Insurance registration form
Car ownership involves purchasing auto insurance. But what circumstances does it protect you against? What does car insurance not cover? Discover the ins and outs of car insurance to make sure you have the coverage you need.

Collision coverage
According to Barbara Marquand, contributor at Nerdwallet.com, this type of insurance protects you during a car accident with either another car or an object. It also covers you if your car flips over and suffers damage.

Comprehensive coverage
This type of insurance is usually sold together with collision coverage, as a package. Comprehensive coverage protects you from harmful incidents not related to car accidents. Per Esurance.com, it covers damages incurred from storms, falling objects, vandalism and collisions with animals like deer.

Liability coverage
In the case of an accident with another car, this type of coverage goes towards paying for the person’s injuries and any car damage incurred.

Liability coverage is usually expressed in three numbers, as Marquand states. For example, a 100/300/500 liability coverage means it will pay a maximum of $100,000 bodily injury per person, $300,000 bodily injury per accident and $50,000 property damage per accident.

Each state varies in the minimum liability insurance that they require; check your state’s requirements before purchasing car insurance to make sure you comply with this standard.

Personal injury coverage
Even if you have health insurance, it’s wise to opt for a car insurance policy that includes personal injury coverage. It covers the medical bills for you or passengers in your car in the case of an accident. If the accident proves fatal, this insurance covers funeral expenses.

Personal injury coverage can be broken down into two subcategories: medical payment coverage or personal injury protection. Some states require one or the other policy, so check your state’s requirements before purchasing this type of insurance.

Uninsured motorist coverage
This insurance protects you if you have an accident with someone who is uninsured or underinsured. It covers your medical expenses if the other driver doesn’t have insurance. If the other driver’s insurance covers only some of your medical bills, then uninsured motorist coverage will pay the difference.

According to Christina Couch, contributor for Bankrate.com, some states have more uninsured drivers than others. In Mississippi, for example, one in three drivers is not insured. If you’re on the fence about whether or not to purchase this insurance option, find out what the statistic is for your state.

Circumstances not typically covered
Although collision and comprehensive car insurance policies can shield you from a wide variety of circumstances, there are some situations that they will not cover.

As Couch notes, car insurance usually won’t cover you for items that are damaged or stolen from your car. For instance, it would cover features that came with your car when you first bought it, such as the radio or CD player. However, it would not cover any gadgets or personal items that were in your car.

Car insurance usually will not cover drivers who are living with you, unless they are specifically listed on your car insurance policy. So this insurance would not cover an out-of-the-house friend or relative who borrowed your car.

Towing and roadside maintenance are two other services that car insurance typically will not cover. However, many insurance companies offer these services as available add-ons to your overall insurance package.

Equipped with this knowledge, you can have peace of mind knowing what each type of car insurance coverage means and exactly what circumstances your policy protects you from.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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Does Gender Impact Auto Insurance Rates?

A few facts you need to know

If you drive a vehicle, as most people do, auto insurance is a fact of life. And everyone is continuously looking for ways to cut their rates. But there are some interesting facts that you may not know when it comes to gender and its impact on those rates.

Car insurance rates are based on various factors, including your age; the make, model and year of your vehicle; and both your driving history and driving record. Location is also crucially important, with insurance rates varying greatly by state. But gender can also impact your rates, with women generally paying less than their male counterparts. While this may seem unfair on the surface, when you dig a bit deeper you’ll see there’s a rationale behind this decision as well.

The Insurance Institute for Highway Safety notes that “Many more men than women die each year in motor vehicle crashes. Men typically drive more miles than women and more often engage in risky driving practices including not using safety belts, driving while impaired by alcohol, and speeding. Crashes involving male drivers often are more severe than those involving female drivers.”

A 2015 study from InsuranceQuotes found that a 20-year-old male will pay just over 20 percent more than a 20-year-old female. “At the end of the day, young men are less cautious, riskier, more distracted drivers,” the study notes.

According to a 2015 article in the Huffington Post, there are three states (Massachusetts, North Carolina and Hawaii) that don’t allow gender to play a role in the setting of insurance rates. Pennsylvania, Michigan and Montana apply the same set of rating factors to both men and women, so there’s no difference in rates in those states either.

There are a few things you can do to alleviate the insurance burden you’re facing; this is especially true for younger drivers who may feel the heaviest crunch of high insurance costs. There are good student discounts of around 20 percent for students who maintain at least a 3.0 GPA and take part in a Driver’s Ed course. If you don’t drive a lot, you can also consider a pay-as-you drive policy that factors in how far, how well and how often you drive. Making fewer small claims and shopping around to compare pricing can also keep your premiums low.

There are many things to consider when it comes to auto insurance rates, but the most important thing you can do is speak to your insurance representative and ask about the best ways for you to save. If you do your homework, you may be able to save big.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How the Type of Car Impacts Auto Insurance Premiums

What you drive affects how much you pay for insurance

When you’re buying a vehicle,CarTypeInsure_Featured there are many aspects to consider — comfort, fuel economy, technological features. — but one consideration that is often overlooked is potential auto insurance rates. And this oversight could be a very costly one, depending on the vehicle.

There are a variety of factors that go into determining a car insurance premium, even when it comes down to the vehicle type itself.

Size – It’s a common misconception that smaller cars often have lower insurance rates due to the fact that they have better maneuverability and ability to avoid a potential accident. In actuality, the opposite is true.

“Statistics prove smaller, sportier cars are driven at higher rates of speed by younger, riskier drivers. Because they’re involved in more accidents, they’re more expensive to insure,” reports Kelly Blue Book’s website KBB.com.

Does that mean larger vehicles like trucks and SUVs are cheaper to insure? Not necessarily. Bigger vehicles mean there is a larger potential to cause damage to other vehicles in the event of an accident, which inflates liability costs.

Price/status – KBB.com states that the cost of a vehicle is the first and primary consideration for most insurance companies when setting the price of the policy. Insurers’ rationale is typically that the more expensive the car, the more expensive it is to repair — namely when it comes to replacing parts, especially on foreign luxury vehicles, or when an entire vehicle is “totaled.”

Engine size – Speed comes back into play here, as the more horsepower a motor has, the more likely the car will be driven faster, leading to a higher risk of accidents. If motor size is not an important factor to you when choosing a vehicle, KBB.com recommends opting for a vehicle with less horsepower.

Likelihood of theft – This factor is somewhat arbitrary, as there can be any number of reasons cars get stolen, from overall desirability to demand for rare parts or even demand for common parts. Unfortunately, it’s those more desired vehicles that can carry with them higher insurance premiums.

The National Insurance Crime Bureau’s (NICB) most recent Hot Wheels report chronicles the most stolen vehicles in the United States. Honda Accord and Honda Civic were the top two most frequently stolen, respectively, in 2014. The list was also inundated with sporty imports due to their high desirability and to the fact that many are convertibles, and soft tops are relatively simple to break into.

Age – When it comes to used versus new in the fight for lower insurance premiums, you may be surprised that there is no clear-cut answer. It’s commonly believed that new vehicles will just cost more due to the fact that they’re new, but the advanced technological safety features and structure of new vehicles drive down those costs. Cars can now more easily avoid accidents before they occur and can also better protect their occupants if an accident does happen.

On the other hand, used vehicles aren’t always cheaper, due to their likelihood of theft.

“Newer cars may be more desirable but are actually targeted for theft far less often, as they are often equipped with anti-theft devices and GPS tracking systems,” auto information research site DMV.org discloses. “Also, car thieves tend to target older cars because they can easily disassemble them and sell their parts for profit.”

With so many varying factors affecting insurance rates, you are not likely to find one single vehicle with the lowest possible premiums. Instead, speak with your insurance provider for more information and guidance.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.