Posts Tagged ‘auto insurance policy’

How Does a Down Payment for Auto Insurance Work

Saturday, March 24th, 2012

Consumers are always looking for ways to keep the family budget balanced. “How does a down payment for auto insurance work?” it is a particularly timely question for people who don’t want to or can’t afford to pay their auto insurance premium in a lump sum.

The down payment that an auto insurance buyer makes is usually the first month’s premium. The company may require the driver to pay a bit more than this amount initially, and the extra money maybe an administrative fee for the cost of gathering the applicant’s information and issuing the policy. A new customer will still need to go through the underwriting process, where the insurance company examines his or her driving record and other personal information in detail. The insurance company has a certain amount of time during which it can cancel any new policyholders coverage and provide a refund for any unused premium paid.

Auto Insurance Payment Options

Each auto insurance provider establishes its own auto insurance payment options for policyholders. The following are examples which may be available from different providers:

  • Pay the full amount at once
  • Budget payment which divides the premium into two installments; the first one due immediately and the second one within 30 days
  • Monthly withdrawal from a checking account on a specified date

Some auto insurance companies allow drivers to pay their premium in three, four, five or  six installments. The greater the number of installment payments, the lower the amount each payment will be.

Policyholders who choose to split their payments up will be paying more over the term of the policy then drivers to pay all at once. The insurance company will probably add an administration fee to each payment, which adds to the total cost of coverage.

In the case of the driver paying monthly, the annual administration fee may be a percentage of the premium which is divided by 12 and then added onto the monthly payment. For many consumers who choose to pay their auto insurance premiums monthly, the additional cost is a price they are willing to pay for the convenience of being able to manage their premium costs in this way.

Down Payment for Auto Insurance Premiums

New customers will need to pay the first month in advance to have their coverage put in place. Since an auto insurance policy is a contract between the insurance provider and the policyholder, the driver will need to pay the company some money to make it legally binding.

Drivers who are looking for coverage online can pay their down payment by credit card or another accepted payment method when they buy a new policy. The insurance company will issue a receipt and provide a temporary insurance card. The card should be placed in the vehicle and kept there until the policy documents and permanent insurance card are forwarded to the policyholder by mail. In the meantime, the temporary card can be used if the driver if the driver is involved in an accident.

Tags: , , , , ,
Posted in General Car Insurance |

Where Can I Find the Best Prices on High Risk Auto Insurance Coverage

Thursday, March 22nd, 2012

Auto insurance is not a “one-size-fits-all” financial product. Drivers who don’t qualify for standard coverage may be wondering where they can find the best prices on high risk auto insurance. Prices from companies which are willing to write policies for drivers who fit this profile vary.

Consumers who want to find the lowest rates for their high-risk coverage need to be prepared to shop around and compare quotes from different providers before buying a policy. This strategy will help them find the best price for the level of coverage they need. The coverage offered to high risk drivers won’t be cheap, but it doesn’t mean they should be paying more than they have to for auto insurance.

High Risk Driver Classification

There are a number of reasons why a person may be classified as a high-risk driver for auto insurance purposes, including:

  • Students
  • Under the age of 25
  • New drivers
  • DUI/DWI charges (Driving Under the Influence/Driving While Impaired)
  • Poor credit rating
  • Multiple accident
  • Several moving violations

Some insurance companies will classify drivers over the age of 70 as being high risk. People in this age group can find insurance companies which will appreciate that they have a number of years of driving experience and offer rates which reflect this fact.

How to Find the Best Prices on High Risk Auto Insurance

High risk drivers have choices when they are looking for coverage. If a driver’s existing auto insurance company is not prepared to extend coverage or the price quoted seems too high, he or she should start shopping around to get quotes from a number of providers. Conducting an online search for “high risk auto insurance” or “non-standard auto insurance” and a driver’s home state will bring up a list of companies which provide this type of coverage.

Next, the driver will need to learn about the companies offering the type and level of auto insurance needed. Pricing is only one factor which should be considered when shopping for auto insurance coverage, Drivers should also make sure that the companies they are considering offer a good level of customer service and have the financial reserves necessary to pay out on policyholders’ claims.

A prospective policyholder can find out about a company’s financial health by checking out its rating from Moody’s, Standard and Poor’s or one of the other agencies which rate companies. Consumers should be looking for companies which have an A+ or an A rating, which indicates that they are stable enough to meet their financial obligations.

This information may be listed on the insurance company’s web site. Checking out the “About Us” or “History” page may reveal it. If the rating is not on the company website, a consumer can find out what it is by contacting a ratings agency directly.

High risk drivers may need to look for coverage from a company specializing in this niche market. Comparing rates from different providers will help them find the lowest premium rates.

Tags: , , , , ,
Posted in General Car Insurance |

Do I Need Auto Insurance for a Stored Car

Tuesday, March 20th, 2012

If you are not currently driving your vehicle, you may be wondering about the answer to the question, “Do I need auto insurance for a stored car?” Owners who have taken their car off the road for a time may not think they need to have insurance in place at all, but the vehicle needs to have a certain level of protection on place.

Auto insurance coverage can be expensive for drivers, and it can be tempting to stop driving the car to save money. Each state sets its own coverage requirements for cars in storage. In some states, all registered vehicles must have liability insurance in place whether they are being driven or not. In other parts of the country, an owner can drop the liability portion of the coverage if the car is not being driven and he or she turns in the plates to the Department of Motor Vehicles (DMV).

Auto Insurance for a Stored Car

Here are a few reasons why auto insurance for a stored car should be kept in place:

Home insurance coverage doesn’t extend to cars. A homeowner’s policy will pay out for losses involving personal property which has been placed in the car but it doesn’t provide coverage for damage to the vehicle itself.
Accidents can occur even when the car is not being driven. A parked car can be scratched or hit by another vehicle, leading to physical damage.
A car which is garaged at a storage facility may not be protected from damage caused by a fire or a natural disaster. The facility owner’s coverage would protect the structure of the building itself, not the vehicles being stored in it.

Liability Coverage for Cars in Storage

If the car is registered with the Department of Motor Vehicles, the owner will probably need to keep liability coverage in place. A car which is being kept on the street or in the owner’s driveway will probably need to be registered with the DMV. In that instance, the owner will need to keep liability insurance coverage in place whether it is being driven or not.

Special coverage may be available for classic cars which are kept in storage most of the time and only driven a couple of times each year. This type of insurance is usually quite reasonably priced, since the likelihood of being involved in an accident during one of the few times the car is being operated is relatively low.

Auto Insurance Coverage for a Stored Car

Owners who won’t be driving a vehicle and who live in an area where they can drop the liability coverage will be looking for a policy which offers only comprehensive protection. It will provide physical damage coverage in case the vehicle is damaged due to fire, vandalism, falling objects or theft.

A driver who is looking for auto insurance for a stored car should make sure he or she asks about discounts which may apply, including ones for multiple vehicles and multiple policies.

Tags: , , , , ,
Posted in General Car Insurance |

Can I Buy Liability Auto Insurance Coverage and Collision/Comprehensive Insurance from Different Companies

Sunday, March 18th, 2012

Consumers may be wondering about the answer to the question, “Can I buy auto insurance liability coverage and collision/comprehensive insurance from different companies?” An insurance policy is made up of several components, including liability and physical damage coverage, but a driver does not have the option of buying separate policies for each one.

The auto insurance liability coverage portion of a policy is made up of two separate parts: bodily injury and property damage liability. Each one covers claims made by the occupants of the other vehicle following an at-fault accident.

Liability Auto Insurance Coverage

Bodily injury liability insurance pays for personal injury claims, including ones for medical bills, rehabilitation expenses and lost wages. This part of the policy also pays out a certain amount for funeral expenses if the accident causes one or more fatalities.

This part of the policy has two coverage limits. The first one refers to the amount of coverage available to pay for injury claims made by one person injured in an accident. The second number is for the amount of coverage in place to pay for injury claims made by all people injured in the same accident.

Property damage liability coverage pays for the cost of repairing or replacing property owned by others following an accident. It covers the other driver’s vehicle, as well as public property. In this instance, public property refers to items like fences, guard rails, sign posts, light stands, buildings and sheds.

Drivers must have at least a minimum level of liability insurance coverage in place to comply with state laws in most parts of the United States. Consumers can choose to buy a policy with a higher level of protection than the minimum amount required by the jurisdiction where he or she lives.

Physical Damage Auto Insurance Coverage

Physical damage auto insurance coverage also has two components: collision and comprehensive protection. Both of them pay out when the policyholder’s vehicle is damaged but cover different types of losses.

Collision auto insurance coverage comes into play when the loss is due to coming into contact with an inanimate object. It also covers a car which has been damaged in a hit-and-run incident.
Comprehensive auto insurance covers a vehicle against losses from something other than a collision. This is the part of the policy which pays out when the vehicle is damaged by falling objects, hail, wind, flooding or striking an animal. It also protects against vandalism, fire and theft.

The policyholder chooses a level of coverage for each type of physical damage coverage, as well as a policy deductible. Drivers must pay a deductible when they make a claim against the physical damage portion of their policy.
If the car is totaled in an accident, the insurance company will make a payment based on its cash value, less the amount of the policy deductible. Drivers who own an older vehicle with a low cash value may want to drop the collision coverage on their car and limit the comprehensive protection to fire and theft only to save on their coverage costs.

Tags: , , , , , , ,
Posted in General Car Insurance |

« Older Entries