Car Insurance

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Car Insurance Policy Options

• Car Insurance - Choosing your policy period

Your insurance coverage is only in effect during the period specified in your policy. This period of time is determined when you enter into the contract with the insurer. Typically, auto policies are in effect for six months or one-year terms. You may also be able to purchase auto insurance for longer or shorter periods of time. 
Generally speaking, your premiums should be slightly lower when you purchase a policy with a longer period. With longer policies, the insurer can spread out the administrative costs of writing the policy over a longer period of time.

• Car Insurance - Canceling your policy

You can cancel your insurance policy at any time before its expiration date. However, be aware that most insurers have specific procedures that you must follow in order to do so. When you cancel before the end of the policy there may be a penalty, but not all auto insurers penalize you for early cancellation. Check with your insurer for more information.

• Car Insurance - Paying your premium

Most insurers give you three options for paying your insurance premium:

• Pay the entire annual or semi-annual premium up front,

• Make a down payment on the premium (often two months worth) and then divide the remainder into monthly installments, or

• Pay an equal monthly amount for 10 or 12 months.

Each payment method has pros and cons. Paying the entire amount up front might be financially impossible for you. A payment plan can be good, but insurers will charge you interest or a monthly service fee. Check with your insurer to see when and if they charge interest or fees for a payment plan.

• Car Insurance - Towing and labor coverage

Towing and labor insurance (also called Emergency Road Service coverage) is an option that provides coverage for emergency road service and towing. Under this coverage, the insurer will pay towing and labor costs incurred each time your "covered auto" or any "non-owned auto" is disabled, up to the policy limit. This coverage is available any time your vehicle breaks down and is not limited to accidents covered under your physical damage coverage.
The insurer will only pay for labor (such as changing a tire or jump-starting your car) performed at the location where your vehicle is disabled, not the repair work done at a service station.

• Covered auto: This term includes all vehicles listed on the Declarations page of your policy. It also includes any passenger vehicles that you purchase during the policy period, assuming you give notice to your insurer within 30 days after you become the owner.

• Non-owned auto: A non-owned auto is a vehicle that either you borrow or use as a substitute for your "covered auto." A borrowed vehicle is covered as long as it is not furnished or available for your regular use. (If a vehicle is furnished for your regular use, you should be listed on that owner's policy.) Substitute vehicles are covered when your "covered auto" is out of normal use because of breakdown, repair, servicing, loss, or destruction.

• Car Insurance - Transportation expense (rental) coverage

Optional rental coverage pays a pre-set amount per day for transportation expenses (usually a rental car) when your car is being repaired because of an accident or other damage. In order for the rental benefit to take effect, the theft or accident has to be one that is covered under the physical damage section of your policy. This coverage may or may not apply to stolen vehicles. Check with your insurer.

This coverage is often limited to $15 per day, with a maximum payout of $450. For an additional premium, the per-day and maximum limits can be increased. The coverage kicks in only when your vehicle is unusable for more than 24 hours. The payment is further limited to the period reasonably required to repair your vehicle. 

Car Insurance - Insurance Emergency Roadside Service

• Car Insurance -  What is Emergency Roadside Service?

Almost all insurance companies offer emergency roadside service. Sometimes they fall under different names such as a motor club or roadside assistance. Basically, these plans can give you help for a variety of roadside problems by calling one number.

• Car Insurance - What Roadside Problems does the Roadside Service Usually Cover?

All plans are different, but most will cover the costs of services to fix a flat tire, getting your keys out of your locked car, running out of gas, jump starting your vehicle, or getting a tow truck

New Car! Make Sure You Have Gap Insurance

Just bought a new car? What if an accident occurred soon after taking your brand new ride off the lot? You have full coverage insurance, right? So, you're covered....maybe not.

When you drive your new car off the lot the value of your vehicle plummets, sometimes as much as 20-30%. Take for instance you pay $25,000 for you new vehicle and have an accident a month later. You probably have only made at the most one payment and if you did not put any money down your loan amount is still close to the $25,000 purchase price. Unfortunately, even with full coverage, which includes comprehensive and collision, you will only receive the market value of your vehicle which could be as much as 20-30% lower than the purchase price.

How Do You  Read  Auto Insurance Policy?

Your policy is a legal contract, so at first glance it can seem confusing. But, if you know what to look for and where to find it, your policy becomes a lot easier to understand. 
Each auto and homeowners insurance policy has three standard parts:

• Car Insurance - Declarations Page

 Here you'll find your name, a statement of the policy period during which you are covered and the amount of premium you pay. The declarations page also includes a detailed description of the insurance coverage's provided and gives the maximum dollar limit the insurer will pay for a claim under each coverage.

• Car Insurance - Insuring Agreement

This is the heart of the policy. It describes what the insurance company will do in exchange for the premium you're paying. The insuring agreement states who is covered: The persons named as insured on the declarations page, residents of the same household and persons using the car with the permission of the insured. Everything is spelled out specifically in an attempt to avoid misunderstanding. Read the definitions section and the list of exclusions that apply to each coverage. Its vital that you know what you are covered for and what you are not covered for when you need to use your coverage!

• Car Insurance - Conditions of the policy

 This section describes your responsibilities when you file a claim, for example how much time you have to report it and what documentation you must give to the insurance company. It also explains the policy cancellation terms. You can cancel your policy at anytime, however your insurance provider may only cancel under certain conditions and with advance notice to you.

Comparing Car Insurance Policies

Before purchasing auto insurance, you should evaluate and compare the various products offered to ensure that you get the coverage you need at the right price.

• Car Insurance - Evaluate the coverage you already have

Before buying new or additional coverage, review the coverage you already have. It's a good idea to sit down with your insurance agent or financial advisor to look over your auto policy. Talk about your current and future insurance needs. You may be able to increase your liability coverage or make limited changes to an existing policy if you find that the coverage you have is inadequate. On the other hand, there may be occasions when you need to purchase an entirely new policy.

• Car Insurance - Important  points to consider

Your annual policy is up for renewal: review it and make necessary changes. The day the quote from your current insurer comes (usually a month or so before your policy expires) is an ideal time to shop around and compare the rates of other insurers.

Your family status changes (married, divorced, kids): You may become more concerned about protecting assets after you get married, or you may wish to purchase more liability or collision coverage after your son or daughter gets a driver's license.

Your property increases in value: Your home is your most valuable asset. Without adequate auto liability protection, your home could be seized to pay a judgment against you.

Your net worth increases: As your net worth increases, you will have more assets (and more valuable assets) to protect. Also, wealthy people are sometimes targeted for lawsuits.

You buy a new (or additional) car: When you buy a car, you'll need to change your automobile policy to insure it. Take a few minutes to review your liability coverage under that policy, and make sure that your liability limits are still adequate.

• Car Insurance - Comparing policy terms and conditions

Although automobile insurance policies are standardized to a certain extent, it's still important to compare policies in terms of price, coverage, exclusions, and the reputation of the insurance company. In this day and age you can find many auto insurance companies on the Internet providing quotes. This is very convenient, but make sure you don't have to buy anything or pay an extra fee. If a company can get your free quotes (which most can), make sure you get the quotes for free.

• Car Insurance - Important  points to consider

Shop around. You can get quotes from insurers either on their websites or by calling their customer service numbers. Make sure you compare several insurers so you can make sure you're getting the best deal.

Make sure you are comparing similar policies. You can't fairly weigh one policy against another unless you are comparing similar provisions and exclusions. Think about deductibles and limits of liability, as well as price.

Weigh the policy cost against coverage and service provided. When buying auto insurance, your goal should be to buy the best quality coverage offered will adequately protects you at a price you can afford. Each insurance company is allowed to set its own rates (within limits), and you may find that coverage at Company A might simply cost more than the same or similar coverage at Company B. You may also find that the premium you pay will be less if you buy multiple policies with the same company.

Evaluate the strength and reputation of the insurance company. It's important to buy auto insurance from a financially sound, reputable insurance company. You (or your insurance agent) should check the ratings published by one of several companies, such as A.M. Best, Moody's, Standard & Poor's, or Duff & Phelps. These ratings can tell you how financially sound an insurance company is. Try to find out something about the claims-paying practices of the insurance company. Talk to your agent or any friends or family members who may have dealt with the company in the past.

Does the company settle claims quickly? Does it refuse to pay certain claims? Does the company have a good reputation in the industry? These intangibles can be very important to your overall satisfaction with the insurance company. 

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