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Concepts In Auto Insurance Explained |
By:
Chris Channing |
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Concepts In Auto Insurance Explained
Chris Channing
It is required to have some form of auto insurance in most states throughout the U.S. However some states do not require this. Instead some states will charge an annual fee that must be paid to the state for each vehicle owned.
If you choose to not have auto insurance then there can be some consequences. Third party insurance is most commonly the lowest form of insurance that a state requires, but if you don't have that there can be penalties. Penalties of not having auto insurance include license or registration suspension and even revocation, a fine, and possibly even jail time.
There are several different coverage plans to choose from when you get your vehicle insured. Liability is the lowest form of coverage. Liability is available through a split limit policy or a combined single limit policy. A combined single limit policy combines both bodily injury and property damage into one single payment. A split limit policy splits the two into different payments. Collision coverage is another one of the many types of coverage's. Collision coverage provides payments for a vehicle that needs to be repaired due to collision damage. If the vehicle is unable to be repaired then the collision coverage will provide payment of the cash value.
A vehicle that is covered by damage from something other than a collision is covered by comprehensive coverage. Comprehensive coverage covers damage from things such as theft, vandalism, weather, and fire. Loss of use coverage, or rental coverage, is yet another coverage plan. Loss of use coverage provides payment on rental expenses associated with an insured vehicle in need of repair due to a covered loss.
In past years auto insurers would only pay for the cost of towing a vehicle if it was related to an accident covered under the vehicles insurance policy. Now there is car towing coverage or roadside assistance coverage. Roadside assistance coverage pays for tows that are non-accident related.
There are a few factors that can determine the cost of insuring a vehicle. Men generally have higher rates to pay compared to women. This is because male drivers tend to have higher involvement in accidents then women do. Age can also affect how much you pay on car insurance. Generally teenagers with no driving record have higher car insurance premiums. If a teenage student has a good academic record it is possible for them to get a discount from their insurer. It is also common that insurance premiums will start to drop around the age of 25.
When your car is repaired under your insurance policy you have to pay a fixed contribution known as an excess payment. Compulsory excess is when you pay the minimum excess payment that your insurer will accept for your policy. A voluntary excess is when you pay extra in the event of a claim on your policy. It is possible to get a lower premium from your insurer if you pay an extra amount through voluntary excess.
There are all kinds of different coverage plans; the main thing to remember when picking one is to find the one that fits your lifestyle. If you really want you can take the cheaper way and go without auto insurance. Not having auto insurance could be more expensive in the end though if you're not careful.
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Article Source: http://www.statssheet.com/articles/article79167.html |
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