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Auto Insurance Facts...

What is the purpose of auto insurance?
Auto insurance is designed to insulate you from many risks you can be exposed to if you own a car. Some of these risks include theft, vandalism, accident, injury to yourself or another, or natural disaster.

How does it work?
The insurance company you choose agrees to cover you for all or some of the risks (i.e. theft, vandalism, accident, injury to yourself or another, or natural disaster) in return for your payment of premium. The details of this agreement are described in a contract known as a PAP or personal auto policy.

Why do I need auto insurance?
It is a requirement in all states that you be financially responsible when driving an automobile. In many states it is a requirement that you purchase at least a minimum amount of insurance or post a bond. However, to ensure that your future and current assets are not at risk you may find it wise to purchase additional amounts of coverage. This additional coverage will cover any legal liability, medical fees, and other driving related losses.


Explanation of specific coverages:


Bodily Injury Liability:
Bodily injury liability insurance is designed to protect members of both vehicles in the event that an accident occurs. Like other liability insurance this coverage protects your assets against potential lawsuits. Even as your car gets older and decreases in value this type of insurance should be kept at a constant level to protect any and all assets that may be subject to lawsuits.

Collision Insurance:
This coverage pays to repair and replace any damage to your car caused by a natural disaster, vandalism, theft, or accident.

Uninsured Motorist Protection:
This type of coverage will cover you if a driver that is uninsured hits you and often it will protect you in the event of a hit and run.

Comprehensive Physical Damage Insurance:
This type of insurance pays for damage to your car by theft, fire, flood, animals and/or other perils.

Property Damage Liability:
Provides coverage for damage to someone else's property by your car and also provides you with legal counsel if that is necessary.


How can I keep my auto insurance premiums as low as possible:

Does this sound familiar?

You've been a responsible driver for many years, but you notice an upsetting pattern; every year your car insurance premiums creep upward. What's going on? What are you doing wrong? Well, the answer may be "nothing." Remember that the cost of providing insurance, as it is with other products and services, may increase for various reasons. Factors that can affect car insurance premiums include the following:

What these items have in common is that they're out of your control...so don't worry about them. However, you do have some control over what happens with your premiums. It may be time to step back and take a fresh look at your car insurance.


How do I evaluate my situation?

A good first step is to gather your insurance records and any other car-related information. Next, determine if circumstances have changed since you last dealt with your coverage. Consider your cars or trucks, how they're now used, who are the drivers and your driving experience. Once this information is handy it's time to call your agent. What should you discuss? Well, here are some areas to consider:

Communicating with your agent
The best way to discuss your insurance needs is to be open and honest with your agent. Giving your agent accurate information puts him in the best position to make certain that you get the best available premium. Carefully answer your agent's questions and provide complete details about any tickets, accidents, or violations in your driving history. This approach also applies to information about who drives your cars and how the cars are used. Finally, your agent is a terrific resource for handling errors about your account or which may be shown in your driver records. . . so use their expertise.


What is the best way to keep my new driver safe and still affordable?

The insurance impact of young drivers

Adding a new young driver to your auto policy can more than double the cost of your insurance. The actual impact on your insurance varies according to your state's regulations. Insurance premiums for new drivers may be based on driving experience, age or even gender. Young drivers add another peril since some states permit policy cancellations after such operators suffer a single accident or violation. So let's focus on ways to control a young driver's impact on your insurance premium and your peace of mind.



Reducing your insurance premiums

Keeping your young driver safer

Don't Trade Protection To Save A Few Dollars.

You must not let the pursuit of lower premiums replace the need for proper protection. It's important that your young driver is protected from the financial consequences of causing a serious accident. Further, you may need to protect yourself since you could also be sued for an accident caused by your son or daughter. You might consider getting higher limits of liability by purchasing an umbrella policy.

The best advice is to talk to an insurance expert about a strategy to keep your new driver safer and to maintain affordable coverage.

Am I covered while driving somebody else's car?

In most cases, the other person's liability coverage would provide the primary coverage for both you and your car, but your personal auto policy would provide liability coverage if costs exceeded the limits of the first policy.

What is a deductible?

Regarding damage to your own auto, collision, and comprehensive coverage may each include a deductible. A deductible is basically a risk that is self-insured. It's an amount of money that you are required to pay before your insurance kicks in. Deductibles can come in any dollar amount, but are generally $100, $250, $500, or $1000.

What is a premium?

A premium is money that you pay for insurance coverage.

What is Artisan use?

Artisan use refers to someone such as a carpenter or landscaper who travels to different locations periodically as part of their business. Tools, ladders, and other equipment, however, are not covered in this insurance.

What is business use?

Business use means that the vehicle is used for work-related purposes but is not owned by the business. Examples include when a doctor makes an emergency call or an attorney visits a client outside of the office.


COPYRIGHT: Insurance Publishing Plus, Inc. 1996, 1998, 1999 All rights reserved. Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.

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