Are You Looking For The Best Auto Insurance Rates?
If your car insurance is about to expire soon, chances are, you will be sent a renewal notice. Most people will just renew their car insurance with their current auto insurance supplier simply for convenience.
However, they do not realize that when they do this, they are missing a great opportunity to slash their car auto insurance by as much as 40%… More about how to take advantage of this great opportunity later.
When it comes to buying car insurance, there are several important factors to consider:
First, it is important to understand more about the different variables that affect the price of a car insurance premium. Basically, these are variables that contribute to the risk factor of a car insurance contract. The higher the risk factor, the higher the premiums that a driver will have to pay.
Car insurance suppliers are always trying to find the right balance between risk and price. For instance, a car insurance supplier may decide to alter the definition of car insurance coverage so that they can keep the premiums low. So the driver may be getting a lower priced auto insurance contract, at the expense of coverage. That essentially means that the driver is actually bearing part of the risk, by not taking on a car insurance contract that provides full and comprehensive coverage. But why would any want to do that?
Many drivers assume (wrongly) that accidents only happen to other people. This false assumption usually land people in financial troubles in the event of an accident. And then there are some people who simply can not be bothered to examine the coverage definitions on an insurance contract.
Perhaps they are so excited about a new car purchase that they forget all about the importance of an insurance contract. Usually, young drivers, or drivers who are impatient, are more prone to this mistake which may eventually turn out to be costly.
This report examines the risks that car insurance suppliers commonly take into consideration, and the variables that affect the price of a car insurance contract. One of such variables discussed, will be the coverage definitions. Towards the end of the report, you will find valuable recommendations on how to slash your car insurance cost by as much as 40%.
Statistics of Car Accidents in the US
A very common problem associated with all types of insurance, is that people sometimes do not believe that bad things can happen to them.
Nobody likes to discuss anything bad happening, so there is a tendency not to give issues like road accidents much consideration especially when one is excited about driving that new car.
However, it is usually when someone is over excited about something that they commit grave mistakes such as taking out a car insurance policy simply based on price alone. Let us take a look at some road accidents statistics.
o Every year, there are over two and a half million casualties caused by road accidents in the United States.
o Of these, over 40,000 are fatalities, and close to 2 million people are seriously injured.
Remember, these accidents happen every single year in the United States alone.
There are many factors affecting the rate of accidents. Most of these factors are related to the driver, but the type and model of a car also affect accident rates. Cars are often privately tested in controlled environments for safety.
Relevant authorities may reveal various safety statistics based on their findings. These are helpful to a certain extent. But remember that the road conditions in the real world are often very different from the conditions in a controlled lab environment. So expect some variance in the statistics.
In general – smaller, lightly built car occupants have a 6% to 8% chance of death in a two car accident.
Cars that are built for safety, such as the Volvos, halve that chance. These cars are usually more robust, and have more safety features. They are also heavier, and tend to consume more fuel.
The safest cars on the road so far are the Mercedes Benz S-Class, Jaguar XJ Series, and the sport utility vehicles (SUVs).
Road accidents also happen due to driver impairment. For some reason, the driver fails to assess and respond to the situation correctly, thus causing an accident. These reasons include poor eyesight, fatigue, excessive alcohol, or consumption of drugs.
What Influences The Best Auto Insurance Rates?
As you can see, the make and model of the car, and the driver are key contributing elements to the risk factor. So car insurance suppliers are inclined to pay more attention to these two key elements while issuing quotes for car insurance contracts.
Usually, car insurance suppliers assign classifications according to the make and model of the car. But bear in mind that although some luxury cars like the Mercedes Benz have lower accident incidence rate, that doesn’t mean the insurance comes cheaper. That is because these cars cost a lot more money, and if there is a claim submitted, the car insurance company may have to pay out a substantial amount of money to settle the claim. So the value of the car is also taken into consideration.
For car insurance providers, the driver’s profile is perhaps the most important factor of all. The only way to obtain an accurate prediction of a driver’s rate of accident is to look at previous driving records. So a driver’s personal driving history is important as well. A car insurance premium will cost more if a driver has previous records of drunk driving or speeding offences.
In addition, the driver’s age is also taken into consideration. The age of a driver is also classified under different age groups. Younger drivers, usually between the ages of 21 to 25 tend to be more inexperienced. As a result, car insurance suppliers need to charge a higher premium for this age group.
Common Car Insurance Coverage Definitions
When examining any car insurance coverage definitions, you have to look out for three things:
1. Who is covered?
2. What does it cover?
3. What is the deductible and amount of coverage?
There are three common types of insurance coverage definitions:
1. Liability Coverage
This type of coverage covers other people’s bodily injury or death. In the event of a third party filing a legal lawsuit against you, liability coverage also provides some form of legal defense. If you find yourself without liability coverage in the event of a serious lawsuit, you may find yourself losing your assets. Having enough insurance will help cover for legal expenses and help safe guard your personal assets.
This is an important form of coverage because there is no limit to the amount of liability that may be incurred from road accidents. Legal and medical claims can certainly sky rocket to astronomical amounts if the accidents are severe.
2. Physical Damage Coverage
This type of coverage covers you car, or a third party’s car, in the event of an accident. A comprehensive insurance contract covers damage to your car if it’s stolen, damaged by bad weather or even animals. Such definitions will be included in your car insurance contract.
3. Uninsured and Underinsured Motorist Coverage
This type of coverage covers when there is an accident that involves property damage, but the negligent driver does not have enough (or does not possess) insurance to cover the liability.
When reviewing your car insurance policy, also take into consideration the legal requirements of different states.
Your responsibility here is to find the right balance between the amount of insurance you need, and the premiums that you are going to pay. For example, you can reduce the price of your premiums by increasing the amount of deductible for your physical damage coverage. If you can afford to pay a high amount for the deductible, you may want to increase the deductible so as to lower premiums. In other words, by taking on more of the risk yourself, you can save more.