Car insurance can be very confusing for anyone. It’s also one of those things that can be very costly if not done right. We rounded up the 10 key things that you may not know about your car insurance.
Having “No-Fault” Insurance
Many people mistakenly think that when they have a no-fault car insurance, no one will be blamed or considered at fault in the event of an accident. If you cause an accident or scratch a car when you park, having this type of insurance doesn’t necessarily mean that you’re safe. If you caused the accident, you can and most likely will be held accountable.
This type of insurance means that if you are in an accident and it isn’t your fault, you won’t personally have to go after the other driver’s insurance or the driver for compensation. The insurance company will do it for you automatically.
Several Factors Impact Your Insurance Cost
You’ll get asked a series of personal questions when you apply for your car insurance. The list can include your gender, age, marital status, and how long you’ve had a license count. Your answers will impact how much your insurance premium will cost per month or year. Additionally, any previous accidents or tickets can make your premium go up.
If you’re a male who is under 25 years old, your insurance company will deem you a higher risk for accidents. In turn, you’ll most likely have a higher premium than a female who is under 25.
Your Car’s Age and Type Increase Your Insurance Costs
People who drive high-end or luxury cars will typically pay more to have their car replaced or repaired in the event of an accident. This means that you’ll most likely pay more to cover this type of car because your insurance will pay out more if there is an accident. Cars that cost less to repair or replace or cars that are older will cost less to insure because it won’t cost your insurance company much if there is an accident.
Modifying the Car Can Cost You
A lot of people like to modify their vehicles, but insurance companies don’t necessarily like these modifications. There are a few valid reasons behind this. First, modifying the vehicle can impact how much emissions it releases into the environment. Second, if something happens and the insurance company ends up with the car, they may not be able to sell it again because the modifications make it illegal to drive on the street.
If you modify your vehicle, the car insurance company may take steps to protect themselves. This can mean increasing your premium. If you absolutely have to modify your car, look for a specific insurance company that won’t penalize you for it.
All Car Insurance Companies Have Different Rates
When you apply for car insurance, it’s vital that you shop around to find the cheapest car insurance that can give you all of the coverage you need. Several search engines allow you to compare various car insurance companies side-by-side so you can find the best rate. Don’t skimp on liability insurance and be very aware of what your car insurance covers and what it doesn’t cover. That way, you won’t get a surprise if you’re involved in an accident.
When you think of car insurance, you usually don’t think of any perks that come with it other than avoiding a ticket for not having it. However, some insurers offer perks for people who are loyal to the company. You may get free towing in the event of a breakdown, tiered rewards with lower rates when you stay with a company for over a year and a refund for not having accidents every six months.
Your Rates May Increase with a Claim
Say you caused an accident on your way to work or school and the other driver filed a claim. Some insurance companies will increase your monthly premium in response to this claim. This includes if you file a claim in the event of an accident as well, and it applies whether or not the accident was your fault.
It Won’t Cover Your Belongings in the Car
Did you know that your car insurance will cover the cost to repair or replace your car and some medical expenses depending on your policy but not any belongings you lose as a result of an accident? For example, say you have your laptop, cell phone, GPS unit, or tablet in the car and they got ruined due to a car accident. Your car insurance won’t cover the replacement cost. It also won’t cover their replacement if they’re stolen out of your car.
It May Cover Pet Injuries
Some car insurance companies have coverage for veterinarian expenses if your pet is in the car and injured when you have an accident. Not all insurance companies offer this though, so you should ask if your pet routinely rides with you. Also, make sure you check on how much the insurance will cover because a lot of them cap at $1,000 for veterinarian bills.
You Can Save Money By Paying Your Premium in Lump Sum Form
Yes, you can pay your car insurance every month. This may seem like the cheaper option upfront. However, you’ll most likely pay more over the course of the year by doing this. It’s better to pay for a year or half of the year when you buy insurance. It’s more expensive upfront, but you’ll avoid additional interest fees, payment processing fees, and other miscellaneous fees.
No matter what insurance company you decide to use for your car insurance, make sure that you compare them. The goal is to get the cheapest car insurance available that will still provide adequate protection in the event of an accident. Take your time, shop around, and pick the car insurance plan that is going to work for you.
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