With an increasing number of car accidents occurring on a daily basis, car insurance has become a necessity. Most states within the United States levy some sort of a penalty if the owner of the car involved in the accident does not possess car insurance. This is typically a fine or suspension of license but this again varies from state to state.
Most car insurance policies provide coverage for a combination of the following – the owner of the car or the insured, the car, third party (both car and individual(s) in the car) or third party damage from occurrences like theft or fire. Typically, coverage provided by insurance companies include collision coverage, liability coverage, medical coverage, comprehensive coverage, personal injury protection, uninsured motorist coverage and underinsured motorist coverage.
As with any insurance, the car insurance provider requires you to pay a premium, mostly annual, which is arrived at by gauging several factors such as the type of car, the age of the car, the age and gender of the car owner, the car owner’s previous driving history including record of any involvement in car accidents and usage of the car. While these facts are used by the insurance company to ascertain if you are a high risk or low risk for them, another factor that influences your premium is the coverage you are seeking – the amount of coverage, the kinds of coverage and the deductible which you are willing to pay.
Deductible refers to the amount that you agree to pay as contribution in the event that your car gets damaged during the accident and needs to be repaired. Also, if the car has been damaged beyond repair and the cost of repair is more than the cost of the damaged car, it is declared to be a total loss or write off by the insurance company. In this instance, the insurance company will pay you the settlement amount minus the deductible you had agreed to pay as per the policy. However, it is not necessary that all accidents are your fault and if the insurance company of the third party agrees to this fact, you can get that deductible from them. Again, deductible varies from policy to policy based on the risk factor. A car insurance company may sometimes agree to reduce the premium amount if you volunteer to pay a higher deductible amount. Again, these terms vary between different insurance companies.
The market is flooded by an umpteen number of companies that provide car insurance but it is the duty of the consumer to do the due diligence. Understand the kind of coverage that is mandatory for you and before you go for any car insurance policy, search online for highly competitive quotes. Also, it is not necessary that once you have taken a car insurance policy, you continue with it. Irrespective of whether you are dissatisfied or content with your insurance policy, revisit the market for competitive quotes when it is time for renewal.