What is auto insurance for, anyway? It is to protect you against financial loss if you have a car accident. It is a contract between you and the insurance company, where you agree to pay them premium, and in exchange, they agree to compensate for your losses as defined in your auto insurance policy.
Before buying auto insurance, read carefully the policy to make sure the coverage meets your needs. The standard auto insurance policy includes the following coverage:
1. Bodily Injury and Property Damage Liability (Liability Limit)
This coverage is required by law. Liability insurance provides coverage for you (and family members listed on the policy) if someone else is injured or killed in a car accident where you are found “at-fault”, and are legally responsible for the injuries. It also provides coverage if their property is damaged. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It is very important to make sure you have enough liability coverage in your auto insurance. If you are involved in a serious car accident, you may be sued for a large amount of money, paying of which could cost you all of your assets such as your home and savings. Therefore, consider purchasing more than the minimum required by law (varies in different states and provinces). If you are uninsured, you will also be charged with driving without insurance, and may be fined. You may also have your driver's license suspended until you have made satisfactory arrangements to repay the amount owing. This could become a critical problem if you are using your car to drive to work.
2. Accident Benefits (Personal Injury Protection)
Accident Benefits coverage pays for the treatment of injuries to the driver and passengers of the auto insurance policyholder's car (medical, rehabilitation and attendant care expenses). It also provides for your (driver’s) family if you are injured or killed in a car accident (funeral expenses, payments to survivors of a person who is killed, etc.). Accident Benefits provide income replacement for persons who have lost income as well as payments to non-earners who are not able to carry on a normal life.
3. Collision
Collision coverage protects your vehicle if it is damaged in an accident, even if you are at fault. There is a deductible amount for this coverage in the range of a few hundred dollars – a fixed amount you pay regardless of the claim amount. The higher your deductible, the lower your premium. Some insurance companies offer auto insurance with zero deductible. If you're not at fault, your auto insurance company may try to recover the amount they paid you from the at-fault driver’s auto insurance company. If they are successful, you will also be reimbursed for the deductible.
This coverage is optional because the cost of insuring some older vehicles for collision could be higher than the value of the vehicle itself.
4. Comprehensive
Comprehensive coverage protects your car against loss due to theft or damage caused by something other than a collision with another car or object, such as fire, explosion, earthquake, windstorm, flood, falling objects, vandalism, riot, or contact with animals such as deer or birds. It will also compensate you if your windshield is cracked or shattered.
There is usually a $100-$500 deductible amount indicated in your auto insurance policy for this coverage. This amount either is paid by you toward the cost of repairs or is deducted from a claims settlement. You may want to go for a higher deductible to lower your premium.
5. Uninsured/Underinsured Motorist coverage
This auto insurance option provides coverage for you, a member of your family, or a designated driver if hit by an uninsured or underinsured driver. This coverage will also protect you if you are hit as a pedestrian.
Some auto insurance companies sell uninsured motorist coverage that will only protect you in the case of at-fault, uninsured driver who is identified at the scene of the accident, and not in the case of a hit-and-run driver. In my opinion, this type of uninsured motorist coverage is not worth it, as an uninsured driver is most likely to be a hit-and-run driver as well (shows equal disrespect of the law).
Sunday, August 27, 2006
Thursday, August 24, 2006
Another insurer cuts California car insurance rates
"SACRAMENTO, August 23, 2006 11:50am
• Chubb says it’s slashing rates by 34 percent
• Also proposes higher liability limits
One of California’s major auto insurance firms is refiguring how it calculates premiums, following court rulings upholding Proposition 103, the auto insurance initiative approved by voters in the last century.
The Chubb Group of Insurance Companies says it is lowering its automobile insurance rates in California by an average of 34 percent.
Chubb also says it will offer new coverage options that it says address the unmet insurance needs of many Californians, “including high limits of liability protection in a state where the number of uninsured and underinsured motorists is among the highest in the nation.”
"Effective today, virtually every Chubb personal auto insurance policyholder in California will realize a rate reduction and will be offered a broader array of coverage options," says Kurt Morgan, California manager for Chubb Personal Insurance, in a written statement. "The assets and lifestyles of thousands of affluent Californians are at risk because they may be underinsured or underserved by their current auto insurer."
The rate reductions will vary based on factors such as driving record, as required by Prop 103, passed in 1988, as well as driver characteristics.
Some drivers will see a reduction of nearly 50 percent, says Chubb.
The company also says it has doubled to 10 percent its good-driver credit. It has introduced a companion credit ranging from 10 percent to 20 percent off the auto insurance premium for customers who also have a Chubb homeowners policy." Source: Central Valley Business Times
• Chubb says it’s slashing rates by 34 percent
• Also proposes higher liability limits
One of California’s major auto insurance firms is refiguring how it calculates premiums, following court rulings upholding Proposition 103, the auto insurance initiative approved by voters in the last century.
The Chubb Group of Insurance Companies says it is lowering its automobile insurance rates in California by an average of 34 percent.
Chubb also says it will offer new coverage options that it says address the unmet insurance needs of many Californians, “including high limits of liability protection in a state where the number of uninsured and underinsured motorists is among the highest in the nation.”
"Effective today, virtually every Chubb personal auto insurance policyholder in California will realize a rate reduction and will be offered a broader array of coverage options," says Kurt Morgan, California manager for Chubb Personal Insurance, in a written statement. "The assets and lifestyles of thousands of affluent Californians are at risk because they may be underinsured or underserved by their current auto insurer."
The rate reductions will vary based on factors such as driving record, as required by Prop 103, passed in 1988, as well as driver characteristics.
Some drivers will see a reduction of nearly 50 percent, says Chubb.
The company also says it has doubled to 10 percent its good-driver credit. It has introduced a companion credit ranging from 10 percent to 20 percent off the auto insurance premium for customers who also have a Chubb homeowners policy." Source: Central Valley Business Times
Car Insurance Rates Drop in New Jersey
"Trenton, NJ (AHN) - For the first times in decades auto insurance companies are competing for business and prices for coverage are declining in New Jersey. Car insurance ads can be found on billboards offering special deals as well as on radio and TV.
This comes as a drastic change for the state where car insurance "has been a long-running nightmare." It now places New Jersey in tune with auto insurance practices elsewhere in the country.
New Jersey has had a history of heavy regulation when it comes to car insurance. As a result, many insurance companies avoided doing business in the state. However, that began to change as authorities, concerned that existing insurers would leave, decided to allow for flexibility in terms of pricing and driver ratings.
John Tiene, a vice president at the New Jersey Skylands Insurance Company told the New York Times, "Lots of rate changes and new rating plans are starting to hit the market... They might have been approved in '04 and '05. But they're just happening now."
Insurance regulators say that more than 75 percent of drivers in New Jersey are paying less for car insurance and more cuts are projected in the future." by Jacob Cherian, All Headline News
This comes as a drastic change for the state where car insurance "has been a long-running nightmare." It now places New Jersey in tune with auto insurance practices elsewhere in the country.
New Jersey has had a history of heavy regulation when it comes to car insurance. As a result, many insurance companies avoided doing business in the state. However, that began to change as authorities, concerned that existing insurers would leave, decided to allow for flexibility in terms of pricing and driver ratings.
John Tiene, a vice president at the New Jersey Skylands Insurance Company told the New York Times, "Lots of rate changes and new rating plans are starting to hit the market... They might have been approved in '04 and '05. But they're just happening now."
Insurance regulators say that more than 75 percent of drivers in New Jersey are paying less for car insurance and more cuts are projected in the future." by Jacob Cherian, All Headline News
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