Monday, December 17, 2007

Auto Insurance - Things You Need To Know

When you apply for an auto insurance quote, you have no idea how much information the insurance company already know about you, and that could affect the premium you will have to pay or even prevent you acquiring auto insurance, if you are considered a bad risk.

Your credit report doesn't even have your insurance risk score. If you have a really good credit rating, because you always pay your debts in good time, you could be rated highly, in comparison with a person who regularly opens and closes accounts, or gets behind in their payments of their accounts. Insurance scores usually move the same direction as your credit history, but not always.

You will do well in making sure that you have conducted your financial life well, before you actually apply for auto insurance.

Another thing that will effect your auto insurance acceptance is your driving record, your previous claims history, and where you live. The state that you live in usually has a required minimum auto coverage.

Some states will also require that you have personal injury protection. You should check you state's requirements to verify how much the minimum is currently, as well as any additional requirements needed to place auto insurance.

Obviously if you have been in numerous previous car accidents, the insurance company you are applying to for auto insurance will be very interested in the facts.

The focus of the auto insurance company will always be on auto insurance losses to themselves.

If you wanted to take a look at your own motor vehicle insurance report, you can access a copy from your state's department, and there are companies you can get your credit history from: i.e.: Truecredit or Experian.

Bodily Injury Liability covers other people's bodily injuries or death for which you are responsible, this means it does not cover you or anyone else who may be in your car, only the person driving the other vehicle. This will protect you against medical bills, loss of income and pain or suffering. If you should require legal defense, you will be covered for that as well. It is possible that a lawsuit be filed against you by another party, and you will want enough auto insurance to cover your expenses without you losing all your personal assets. All this should be stated in your policy.

Auto insurance cover for your own vehicle would be called comprehensive insurance, and that should cover damage to your car if it is stolen, damaged by flood, fire or animals and pays to fix your car, less the excess you have agreed upon. The excess is the deductible that you arrange to pay out of your pocket before claiming from the auto insurance company. In order to keep your premiums low, one usually selects as high a deductible as possible.

Auto insurance covers damage to your car when your car hits, or is hit by, another vehicle or other object. The insurance company pays to fix your vehicle, less the deductible you choose.

If you are driving quite an old car you could consider dropping this coverage, as the coverage is usually limited to the value of the car.

In most cases, your spouse would also be insured if you have named him/her on your policy. You will need to confirm this with your insurance company. If you have a boy/girlfriend you live with and s/he uses your car and is involved in an accident, you may not be able to claim from your auto insurance company, unless you have been given permission and s/he has been added to your auto insurance policy.

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