Auto Insurance is a commitment that cannot be avoided and you may feel stranded if you don’t have one. But here, when you apply for one, there will be just so many hidden clauses that may send you into a tizzy. That’s because most of the time you have little or no knowledge about the insurance complexities. But you cannot run away from the fact, as auto insurance is a must in most states.
So with no choice left you need to understand a few facts rather pesky prints about the auto insurance and the first step towards this would be to get an idea as to what benefits are covered under the insurance you choose to buy, and then you can plan to save some money by comparing it with other insurance firms. Read on for more information….
Have ample knowledge about the insurance cover
You need to know the exact amount of insurance that suits your convenience and pocket. Once you claim for an insurance cover your next premium automatically increases. For example, if you meet with an accident don’t be complacent and think that the damages will be covered by the insurance company, give a thought as to how much will the auto insurance really cover; probably much lower than what you have claimed. Be clear about this factor with the insurance agent before taking the insurance.
The other factor you must be aware of is that after the first accident the rates increase by 20-40% if you are at fault, and this rate is calculated considering the average amount of the claim and the processing fee of the insurer. And the safe option to deal with this is to go for an ‘accident forgiveness’ policy.
Depreciated value claim
In case you are a third party claim, you will be having the benefit. For example, if someone hits your vehicle you can claim for a diminished value from your auto insurance company, because you do not have any deal with their auto insurer. Making such a claim in a first party situation is not valid in most states. One must also remember that once your car has met with an accident in spite of the repairs whatsoever, the insurance company will lower the value of your automobile.
Do not pay in parts
Paying the auto insurance premium monthly, quarterly or half–yearly could bore a hole in your pocket because you will be charged with processing fees. And the best option to avoid this scenario is to pay a lump sum.
There are other points to keep in mind and that is if you want to change the insurer then you need to inform the old insurer in writing that you intend to cancel your policy with them. If required you will have to prove about the new auto insurance policy to your old insurer and also inform the financing company in case if you have dealt with dealer financing. And, last but not the least; choose an auto insurance policy that offers high deductible and liability levels as they can save you a lot of money.