There many things that people don’t understand about car insurance. These misunderstandings lead to checkbook shock when it’s time to pay the premium or even when it’s time to change auto insurance carriers. People should have some basic understanding when it comes to auto insurance so they can make the best decisions for their budgets.
Almost every driver must have some type of auto insurance. Even if the driver doesn’t have a car, they should have insurance because they are still licensed to drive and can be in a car accident. Each state has a required amount of insurance that everyone should have. Those that choose to have more insurance than what is required will have more of a financial cushion if they are ever in an accident.
The Little Truths that Count
For some reason, people have a mistaken impression about some parts of car insurance. These miscalculations and communications can cost the uneducated a lot of money they can’t always afford. Instead of allowing those mistakes increase the cost of their insurance premium, car owners should understand a few facts.
No Fault Insurance Still Finds Fault
Almost every accident will find someone that is at fault. No fault insurance doesn’t take the blame of an accident away nor does it say that neither party is responsible. No fault insurance is coverage that covers the personal injury damages to the insured regardless of who is at fault. In normal circumstances when an accident happens, the person that is at fault has to pay for the personal injury damages that have occurred. With no fault insurance, there is no need to wait for reimbursement from the other insurance company for personal injuries that have happened.
The Company Sets the Insurance Rates
This is one of the biggest misunderstandings that people have. When someone applies for car insurance, many things are considered. Insurance companies look at each applicant’s credit history, insurance history, driving record, marital status and other factors before determining a premium. While each company has a different equation they use to find the premium rates, many of the factors are still the same. In short, each person’s history plays a huge role in how much their premium will be. The older a person is and the better their history is, the better their premium payment will be.
Comprehensive Coverage Covers EVERYTHING
Comprehensive coverage sounds like it covers everything under the sun. While it sounds like it, it really doesn’t. Comprehensive car insurance only covers damages that don’t come from falling objects, collision, fire, certain natural disasters, vandalism, glass damage, damages from hitting an animal and vandalism. If damages occur from any of the above, comprehensive coverage is not going to help. This is an add on that is wonderful for people to have if their car is eligible but comprehensive coverage isn’t the insurance that pays for everything but it does pay for a lot.
Shopping for car insurance can be tricky. It’s something that can be done easily with a bit of research and thought. Those that have questions shouldn’t shop for their insurance without getting the answers they need. Although it can take time, asking questions about car insurance can save people a lot of money.