How Much Car Insurance Do I Need?
Consider the following three questions with the help of your agent:
1. How high should my liability coverage
No one can predict exactly how much you would have to pay if you
were to cause an accident.
Ask yourself how you would pay for any damages exceeding your
The higher your liability coverage limits are, the more likely
your policy will be able to pay all of the damages.
2. How high or low should my collision
and comprehensive deductibles be?
Higher deductibles lower your premium but increase the amount
you must pay out of your own pocket if a loss occurs.
Ask yourself how much you would be willing and able to pay on
short notice in order to save on your premium.
3. Should I carry collision and comprehensive
You may be required to carry collision or comprehensive coverage
if your vehicle is leased or financed.
Once you have paid off your car, and its value decreases, you
might consider dropping these coverage's to save money on premiums.
Consider, though, whether the savings would be enough to offset
the risk of having to pay the entire cost of repairing or replacing
What affects the price of Auto
The cost of car insurance varies by insurance company and by:
What you buy
How many coverage's you buy
What kind of car you drive
If you are buying or selling a car, you will need to re-evaluate
your auto insurance needs.
Generally, the more expensive the car, the more you pay.
Where you drive
Generally, due to higher rates of vandalism, theft, and accidents,
urban drivers pay more for auto insurance than those in small
towns or rural areas.
How much you drive
People who use their car for business and long-distance commuting
normally pay more than those who drive less.
Your age, sex and marital status
Accident rates are higher for all drivers under age 25, especially
young males and single males. Insurance prices in most states
reflect these differences.
Your driving record
Drivers who cause accidents generally must pay more than those
who are accident-free for several years.
Your credit history
Studies have shown that credit history is a powerful predictor
of future auto insurance losses. Many insurance companies consider
certain credit characteristics in addition to many other factors
when determining an individual's rate.
What can I do to save money on my auto
If you're shopping for a car, consider how your choice will affect
Some insurers increase premiums for cars more susceptible to damage
or occupant injury, and lower rates for those that fare better
than the norm.
Ask about discounts for good students, insuring more than one
vehicle, accident-free driving, and others.
Consider joining a car pool, or finding other transportation to
work. If you reduce your driving mileage enough, you may lower
Coverage and Deductible Options
What is a deductible?
A deductible is the part of a covered loss that you have agreed
to pay with your own money.
If you file a claim against your insurance, you will pay only
the amount of the deductible.
When choosing a deductible, you must decide how much you would
be willing and able to pay out-of-pocket, if you ever had to file
Typically, higher deductibles mean lower premiums.
Who does my auto insurance policy cover?
An Auto Insurance policy typically covers:
You and your spouse
Relatives who live in your home
Other licensed drivers who have permission to drive your insured
Types of auto insurance coverage
An Auto Insurance policy generally consists of several kinds of
Because all 50 states have different laws when it comes to Auto
Insurance, the following coverage descriptions are simply general
information. They are not statements of contract.
To learn more about auto insurance in your state, contact your
Most Common Coverage's:
Auto liability coverage pays for the damage if you are legally
responsible for accidentally injuring someone, or for damaging
another vehicle or other property in an auto accident.
Auto liability coverage falls into two categories:
Bodily Injury Liability - which covers medical expenses,
pain and suffering, lost wages, and other special damages.
Property Damage Liability -- which covers damaged property, and
may include loss of use.
Liability coverage also pays legal defense and court costs.
State laws usually dictate the minimum amounts of insurance required,
but higher amounts are available.
Personal Injury Protection (PIP)
This coverage pays the reasonable and necessary medical expenses
for covered persons for treatment due to an auto accident.
It may also pay for:
Replacement of services (For example, child care if a parent is
This coverage is available in most states. It pays medical and
funeral expenses for covered persons when those expenses are related
to an auto accident.
This coverage helps pay for damage to a covered vehicle caused
Collision with another vehicle
Collision with an object
A vehicle rollover
A deductible is required.
This coverage helps pay for loss of or damage to an insured vehicle,
not caused by a collision or vehicle rollover.
Examples of this type of damage or loss include:
Hitting an animal
A deductible may apply.
This coverage pays for damages when a covered person is injured
in an auto accident caused by a driver who does not have Liability
In some states this coverage may also pay for property damage.
This coverage varies by state and depends upon policy provisions.
This coverage pays for damages when a covered person is injured
in an auto accident caused by another driver who has insufficient
Application of this coverage varies by state and depends upon
This coverage pays for renting a car when your auto is disabled
due to an auto accident.
Daily allowances or limits vary by state or policy provisions.
Emergency Road Service
This coverage pays for having your auto towed due to a breakdown.
Towing limits vary by state or policy provisions.
This information is only a general description of the available
coverage's and is not a statement of contract. All coverage's
are subject to all policy provisions and applicable endorsements.
New teenage driver at home?
Let your Insurance Agent help:
1.) Add a driver to your auto policy. You can:
2.) If you are not adding a vehicle, the new driver usually needs
to be rated as a primary driver on one of the family vehicles.
3.) Your insurance rates will typically increase when a new driver
is added to a policy.
4.) Talk with your teenager about safe driving, as well as how
traffic violations will affect your rates.
5.) If you are buying a new vehicle, you may want to consider
which vehicles get the lowest rates.
6.) Consider getting a Personal Liability Umbrella Policy (PLUP).
If you or your teenage driver accidentally injures someone or
damages their property, you could be sued.
Even though your underlying policies may provide substantial liability
limits, it is not uncommon today for juries to award damages that
exceed those limits. Coverage amounts are typically written
in increments of $1 million and supplement your present policies
to provide additional personal liability protection.
Find out if you qualify for any discounts in your area, such as
a Good Student Discount.
Driving with a cell phone
A study released in February 1997 by the New England Journal
of Medicine might make you put some distance between yourself
and drivers busy talking on their cell phones.
University of Toronto researchers discovered:
Cell phone users were four to five times
more likely to have crashes than non-users.
Cell phone units that allow the hands to be free offer no safety
advantage over hand-held units.
- The main factor in most motor vehicle collisions is driver
Be cell phone savvy
While convenient, using cell phones while driving can be hazardous.
The American Automobile Association
offers these tips:
Make sure your phone is mounted where you can easily reach it
while driving. The phone should be within comfortable reach
in your usual driving position and as close as possible to your
line of vision.
Know all the operations of your cellular phone and learn to
use it without looking.
Keep your attention on the road by programming frequently called
numbers into the phone's memory to minimize dialing.
Dial sensibly. Wait for a stoplight, pull off the road to dial
or ask a passenger to dial for you.
Don't use your cellular phone in distracting traffic situations.
Pull off the road to make a call.
Be careful about where you stop to make calls.
When calling 9-1-1 to report an emergency, be prepared to provide
the closest major cross streets or off-ramps, and know your
cellular phone number.
Use your voice mail to take calls or leave yourself messages.
Never take notes while driving.
Disconnect your cellular phone when using jumper cables; the
power surge could burn out your phone.
A few states actually regulate cell phone use, including California,
Florida, Massachusetts, Oklahoma and Minnesota. Oklahoma and
Minnesota require police to include cell phone information in
accident reports. Several countries prohibit cell phone use
while driving including England, Switzerland, Spain, Australia
Police suggest calling 9-1-1 from your cell phone only in true
Any life-threatening event
Any crime against you or another person
A vehicle or object blocking traffic lanes
A suspected drunk driver
Do not use 9-1-1 for situations such
A stalled vehicle off the roadway
A broken-down vehicle that is not a hazard
Winter road conditions
A stolen vehicle when nothing is known about the suspected thief
Asking for directions
Testing your phone
When you dial 9-1-1, the
call from your cellular phone is routed to the appropriate emergency
response authority. Be prepared to provide:
Exact location of vehicle in distress
Nature of emergency
Your name and cellular number, including area code
Be safe on the road