Auto Insurance Basics – What You Need to Know Before You Get an Auto Insurance PolicyMay 19, 2021
Auto insurance is basically a contract between you and an insurance provider that guard you financially in case of an accident or even theft. In return for your paying a monthly premium, the insurer promises to pay your claims as outlined in your contract. If you do not have insurance, you are considered an “uninsured driver” and will be liable for all damages and injuries that may occur due to your own carelessness or inactions of other drivers or even pedestrians. Here are some basic tips on how to get cheap auto insurance.
The first thing you must do is to keep yourself out of any accidents. Accidents, no matter how minor, do cost you money in terms of repairs and medical bills, which you will need if you need to file a claim. If you are at fault in an accident, your car insurance rates will increase immediately, making it difficult for you to make even the minimal monthly payments. For this reason, it is advisable to take some kind of driver safety class before you purchase a new car, and to complete it in the presence of a licensed instructor so that you can be trained how to safely drive a car and avoid accidents.
Next, do not claim for minor scratches or damage to your car because these can be easily covered by your auto insurance coverage. Claiming for damages to your car can lead to your premiums going up and can have a negative effect on your credit rating. Additionally, do not drive while suffering from a serious medical condition that could potentially require extensive medical treatment. Be sure to get yourself checked out thoroughly by your doctor if you think there is something seriously wrong. If you do end up having to undergo medical treatment, then it is best to be treated by a specialist rather than try to treat yourself with over-the-counter pain relievers. Finally, do not purchase a brand new car without obtaining collision and medical coverage for the vehicle as many states require.
The final thing you should know about your auto insurance is what happens if you are in an accident and no one can be found to pick up the pieces. Your policyholder files a claim with the auto insurance company, but the coverage doesn’t pay off until the at-fault party is found. This means if no one picks up the broken pieces, your policyholder could owe the auto insurance company for the entire cost of damage to both his or her own vehicle and any other vehicles involved. If your policyholder fails to appear at the scheduled court date, your claim could be denied, which can be a hassle for the policyholder.
These are all situations that could result in your driving record being affected negatively, but they can also affect your ability to obtain a job. Many companies look at drivers’ records to determine their risk level, so missing too many traffic violations can be problematic. Ultimately, it is important to carefully weigh the pros and cons of maintaining auto insurance coverage, because paying the money up front may not be the best option if you are forced to file a claim and have a low amount awarded against you.
Auto insurance can provide financial protection for you and your family. However, there are several things you need to know about your auto insurance policy before you sign up. Understanding how your policyholder will be penalized if you are in an accident is just as important as knowing what types of damages your policy will cover. This is especially true if you drive for a living, since the cost of auto insurance on your job can easily exceed the cost of your premiums.