Important Facts You Must Know About Auto Insurance

Couple sitting on the back of four wheeler

Auto insurance protects you as you travel around town in your vehicle. Research shows that accidents occur due to multiple reasons: poor weather, bad driving behavior, and even freak accidents such as animal collisions. Here’s an in-depth look at why auto insurance is so beneficial.

Purchasing auto insurance can be complicated because of all the variables considered. While shopping for auto insurance quotes, you may be confused by the term insurers use. Be aware that some of those thoughts are influenced by long-standing myths. Let’s take a closer look.

  • Collision/Comprehensive Coverage

  • Research shows that there is a lot of misinformation regarding the roles of these policies. Comprehensive and collision coverage are optional policies designed to provide more protection for starters. The only mandatory form of coverage is liability insurance. Liability insurance covers you if your vehicle is responsible for hurting someone or causing property damage. Liability insurance covers the necessary costs regarding medical treatment and repairs. Collision coverage protects you if your vehicle suffers damage due to an impact with another vehicle or object. You will be compensated for the necessary repairs minus your deductible. Comprehensive coverage does not protect your vehicle if it is damaged in a collision, but you are covered if your vehicle is damaged in unique ways, such as a collision with a deer or inclement weather. You are also covered if your vehicle is stolen or vandalized.

  • Determining Your Premium

  • While searching for auto insurance, it’s recommended that you learn about the formula for calculating your premium. Some of the common factors include driving history, driving frequency, the model of the vehicle, age, marital status, and gender. Research shows that young drivers are more likely to be involved in an accident, while married drivers are statistically safer. Your address is a factor, too, as people who reside in high populated areas are considered higher-risk drivers than those who stay in rural areas. Your credit score is another factor to consider. If you have good credit, your premiums will be lower.

  • Personal/Commercial Auto Insurance

  • Most auto insurance policies restrict using a vehicle to complete business-related tasks. If your vehicle is damaged on the job, it’s possible that your insurer may cancel your policy. If necessary, speak with your insurer about adding an endorsement to your policy, which allows you to use your vehicle for commercial purposes. If you work for a ride-share company, they may provide insurance while you’re transporting a customer, but you’re at risk in between passengers.

  • Letting Your Policy Lapse

  • You may be tempted to let your policy expire when you are taking a hiatus from driving, but this is not ideal and could cause more problems in the future. If you let your coverage lapse, your insurance premiums will be higher on your next policy. Many auto insurance companies consider uncovered drivers as high risk. If you plan to take a hiatus from driving, speak with your agent and assess your options.

  • Saving Money on Auto Insurance

  • If you are on a budget, you can lower your auto insurance bill in a few ways. Generally, that means lowering your coverage. You also have the option to increase your deductible, which is the amount you are responsible for paying before your auto insurance handles the remaining balance of the covered loss. Qualifying for a discount is another option. Insurance companies may offer discounts if you keep low mileage on your vehicle, practice safe driving habits, or add the latest safety features to your vehicle.

  • Shopping Around

  • It’s recommended that you shop around and compare different auto insurance quotes. Every company has its own unique underwriting policy. Look for a company that provides good rates and excellent customer service.

Consult with Udell Family Insurance

Learning as much information as possible about auto insurance can help your search run smoothly. Be aware that your coverage needs will likely change over time. If you have any questions regarding coverage, contact the team here at Udell Family Insurance, and we will assist you.

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