The Fundamentals Of Auto Insurance

In most states throughout the United States auto insurance is compulsory. Some states, however, do not require an individual to buy auto insurance. For instance, the state of Virginia requires that residents pay $500 to the state annually per vehicle if they do not wish to purchase liability insurance for their vehicles.

There are some drawbacks to not having auto insurance though. Penalties of not having auto insurance involve a substantial fine, possible jail time, or license or registration suspension and even revocation. Penalties can vary from state to state however. Third party insurance is generally the lowest type of insurance a state requires.

Liability is a form of auto insurance coverage. Liability is available in either a split limit policy or a combined single limit policy. A combined single limit groups property damage coverage and bodily injury coverage as one. The split limit policy splits bodily injury and property damage into two separate payments. Another form of coverage is collision coverage. Collision coverage is coverage that provides payments to repair a vehicle that has been damaged. Collision coverage also provides payment of the cash value if the vehicle cannot be repaired.

Coverage for a vehicle that receives damage from something other than a collision is called comprehensive coverage. Damage other than collision would be considered fire, weather, vandalism, or theft. There is also rental coverage or loss of use coverage. Rental coverage provides payment on rental expenses associated with an insured vehicle that needs repair due to a covered loss.

Car towing coverage, or roadside assistance coverage, is the last form of coverage. In the past a car insurance companies normally would only pay for the cost of a towing if it is related to an accident covered under the policy of insurance. The car towing coverage, however, pay for non-accident related tows. Non-accident related tows include things such as mechanical issues, flat tires, and running out of gas.

A factor that may have an effect on your insurance rates is your age. Generally teenage drivers have higher insurance premiums. Some auto insurers will give a student a discount if they make good enough grades in school. Normally peoples premiums are lowered when the reach the age of 25. Another factor that affects your rates is your gender. Males tend to have higher rates than females. This is because males have a higher involvement in accidents compared to females.

When your car is repaired under your insurance policy you have to pay a fixed contribution known as an excess payment. Compulsory excess is when you pay the minimum excess payment that your insurer will accept for your policy. A voluntary excess is when you pay extra in the event of a claim on your policy. It is possible to get a lower premium from your insurer if you pay an extra amount through voluntary excess.

In conclusion it is a smart idea to at least insure your vehicle with liability coverage. Don't forget there are many other different types of coverage to choose from. Some may suit you better than liability. If you don't choose to insure you vehicle remember that there can be consequences to pay. Just choose what you feel is best for you.

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