When you are involved in an automobile accident you suddenly have a lot of unplanned expenses that may cause you considerable financial hardship. Auto insurance is designed to protect you against these expenses. The cost of your auto insurance policy depends on the type(s) of coverage you purchase as well as your personal driving record. Some types of coverage are required by the laws of the state in which you live. Read on to discover what Insurance Doctor has to say about how you can obtain the insurance the law requires while lowering your annual costs.
Basic Automobile Insurance
Any automobile policy is made up of different types of coverage. Some are basic types required by law and the others, while not required, provide additional layers of financial protection for you. Each type has its own exclusions and limitations. When seeking cheap car insurance, always review your policy yourself and go over it carefully with your insurance agent to assure you are receiving all the coverage you want. Don’t sacrifice protection if you can afford it.
Basic Insurance Requirements
Let’s take the states of North Carolina and Virginia and compare their minimum auto insurance requirements. Liability insurance is the most basic type of insurance coverage. It will pay for property damage and bodily injury for which you become legally responsible. It covers you whether you are driving your own car or someone else’s vehicle. With Liability coverage, there are separate liability limits per accident and per person injured.
North Carolina requires all drivers to carry liability insurance. Virginia requires all drivers with insurance to carry liability insurance. Virginia offers an exception if you are willing to pay Virginia Department of Motor Vehicles (DMV) an Uninsured Motor Vehicle (UMV) fee of $500. This registration must be renewed periodically with another $500 fee. You don’t receive insurance with this fee. It merely allows you to drive an uninsured automobile at your own risk. “At your own risk” means just that. If you have an accident, the financial responsibility is all yours.
North Carolina requires higher amounts of minimum coverage than Virginia does. Read and compare the following:
North Carolina Minimum Coverage
Bodily injury liability, per person per accident $30,000
Bodily injury liability, total per accident $60,000
Property damage liability, per accident $25,000
North Carolina law specifically requires you to have the financial means of covering injuries and property damage costs resulting from an auto accident in which you are at fault. Auto insurance is the most convenient way to do this. Unlike Virginia, North Carolina also requires you to carry coverage for uninsured motorists (to protect yourself). When searching for cheap car insurance, be sure you purchase at least the legally required minimum coverage.
Virginia Minimum Coverage
Bodily injury or death of one person $25,000
Bodily injury or death of two persons or more $50,000
Property damage per accident $20,000
Both states impose severe financial and other penalties for non-compliance. These include monetary fines as well as other actions, up to losing your vehicle’s licensing and your driving privileges.
Optional Auto Insurance Coverage
Two other major types of coverage include Collision (covering damages to your car from other moving vehicles) and Comprehensive (covering your car for damages not related to a moving vehicle accident, such as vandalism). If you are still making payments on a car loan or lease, your bank or finance company will require you to purchase these.
Other available coverages include but may not be limited to total disability benefits coverage; automobile death indemnity; specific disability; extended transportation expenses (rental reimbursement);towing and labor costs; coverage for rental vehicles; and coverage for damage to auto (on data, visual and audio electronic equipment). These are strictly optional choices.
How to Lower Car Insurance Costs
The best method of maintaining low-cost auto insurance rates is to be a good driver, obeying all traffic laws and driving safely. If there are other drivers on your policy, they should be good drivers also. Bad driving is always penalized with higher car insurance premiums. A new inexperienced driver will also impact your premiums. North Carolina and other states use a point system that penalizes bad drivers. The more points you have, the higher risk you are to an insurance carrier so accordingly you pay more. In North Carolina, one point on your license means a 30 percent increase in your insurance premium.
Take Advantage of All Available Insurance Discounts
Some discounts are fairly automatic with most insurance companies but it never hurts to ask your insurance agent about each of them specifically to make sure you receive all the discounts that apply to you and your situation. These discounts include:
•Anti-lock brakes, airbags and other built-in safety features
•Multi-policy (car insurance bundled with homeowners insurance)
•By Payment Method: Discount for paying entire policy at one time annually or Cost savings for setting up automatic debits for payments.
There are other potential discounts for which you need to specifically ask your agent. These include:
•Distant student (if your young driver is away at college with limited access to any of your covered cars)
•Auto theft alarm
•Defensive driving course( particularly for drivers 55 and over)
•Driver Education course
Always get quotes from a variety of companies to find the one that gives you the best price for the coverage you need and want. This is the best way to purchase cheap car insurance.