Auto Insurance Primer

What is auto insurance? Auto insurance (or car insurance, motor insurance) is insurance consumers can purchase for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred. By buying auto insurance, depending on the type of coverage purchased, the consumer may be protected against:

* The cost of repairing the vehicle following an accident

* The cost of purchasing a new vehicle if it is stolen or damaged beyond economic repair

* Legal liability claims against the driver or owner of the vehicle following the vehicle causing damage or injury to a third party.

Liability insurance covers only the last point, while comprehensive insurance covers all three. Even comprehensive insurance, however, doesn't fully cover the risk associated with buying a new car. Due to the sharp decline in value immediately following purchase, there is generally a period in which the remaining car payments exceed the compensation the insurer will pay for a "totaled" (destroyed, or written-off) vehicle. So-called GAP insurance was established in the early 1980's to provide protection to consumers based upon buying and market trends. The escalating price of cars, extended term auto loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a "gap" exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company. In some countries including New Zealand and Australia market structures mean that people are more likely to buy a nearly new car than a new car so this is less of a problem.

In the United States, liability insurance covers claims against the policy holder and generally, any other operator of the insured's vehicle, provided they do not live at the same address as the policy holder and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is necessary for example, when a family member comes of driving age they must be added on to the policy. Liability insurance generally does not protect the policy holder if they operate any vehicles other than their own. When you drive a vehicle owned by another party, you are covered under that party's policy. Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle.

Generally, liability coverage does extend when you rent a car. However, in most cases only liability applies. Any additional coverage, such as comprehensive policies, i.e. "full coverage" may not apply. Full coverage premiums are based on, among other factors, the value of the insured's vehicle. This coverage may not apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured's vehicle, assuming that a rental car may be worth more than the insured's vehicle. Some states, such as Minnesota, may require that it extend to rental cars. Most rental car companies offer insurance to cover damage to the rental vehicle. In some regions, the costs associated with not having access to the vehicle ("Loss of Use") is also covered.

Don't Just Accept Your Car Insurance Renewal Quote

UK car insurance companies make substantial profits every year because a large number of existing customers just accept the renewal quote from their car insurance provider and don't bother to compare premiums.

Many people assume that because their first years premium was competitive they will continue to get good value for money from the same insurer. In fact, as an existing customer renewing your car insurance policy, you could be paying for discounts your insurance company offers to attract new customers.
This is a common way for UK car insurance companies to get new customers onto their books.

Become a New Customer Again

A simple way to ensure you don't pay more than a new customer for exactly the same cover is to become a new customer again.

Instead of just accepting your renewal premium, get a quote from your current insurer as a new customer. This will expose any discount given by your insurer to new customers which you will be paying for if you renew as an existing policyholder.

Call the insurers advertised phone number or get a quote from their website, but don't use the contact details from your renewal pack as this will result in policyholder rates.

Shop Around

Armed with the best quote from your current insurer compare it against at least ten other car insurance companies. The internet makes this far less hassle than it used to be and you can now get multiple quotes from major insurers using comparitive car insurance sites such as Moneysupermarket and Screentrade.

Car Insurance Gearing up to Drive Down Costs

For once finances seem to be going in favour of the UK motorist, with Esure announcing plans to double its share of the UK's car insurance market - a move which is likely to spark a price war, other internet-only direct insurers passing on to consumers savings based on their low overheads, and specialist insurers offering reduced rates for their particular target markets. A trial pay-as-you-go scheme from Norwich Union is also creating a lot of interest for money conscious motorists.

The pay-as-you-go scheme uses a small box costing an initial £199 which is fitted in the driver’s boot, to record when and for how long a driver actually uses their car. The box stays in contact with a satellite which is sent regular updates of the journey data stored on the box, tracking the vehicle and then delivering the information to the insurer. The driver is then charged based upon how far at what time they used their vehicle.

“We got a statement”, said one member of the trial, "which showed what mileage we had done, and on what days of the week, as well as if we had been driving in the evenings or peak hours."

For low mileage users, this system could present significant reductions in premiums, for higher mileage drivers searching about for the best deals at renewal time is an absolute must.

Unfortunately, last year five million motorists failed to shop around, missing out on an average premium saving of £180. Shopping around becomes especially important for anyone coming to the end of a free insurance offer on a dealership car and should not simply take the quote offered by the manufacturer's insurer, as significant savings can be made by shopping around. Comparisons sites such as Moneynet enable consumers to quickly look at hundreds of insurance providers in one go, making it easy to find the best deals that are available, and they often have their own extra discounts which are provided through their own sites.

While the government tries to work out new ways to extract more money from motorists, the competitiveness of the insurance industry is thankfully helping to drive down the cost of insurance premiums, making it one of the few rays of hope for UK drivers.

Motor Insurance

Motor insurance is a requirement if you want to be able to safely and legally drive a car. A car insurance policy is there to provide you with cover in the event of an accident or damage to your vehicle and therefore against the high cost that such damage could cause.

There are a great number of companies that can offer you car insurance within the UK and it can often seem like a frightening task to attempt to find the best deal for you as the quotes and prices you will pay can vary greatly. There are also now a variety of companies that can provide specialised car insurance then can be much cheaper and is aimed at specific areas of the market and if you do fall into one of these groups then it can be a very cost effective way of keeping your car insurance low and also finding other beneficial services that are applicable to your group.

Factors that are worth considering are who will be driving the vehicle and which type of events you wish to be covered for. The make and model of the car that you own goes along way in determining the cost of your policy as many cars are insured depending upon the engine capacity and how powerful the car is as you are thought to be more at risk of being involved in a claim. It is worth remembering that when you a purchase a new car to not surpass your budget or purchase a car that is very powerful since you must take into account the effect this will have upon the cost of your insurance.

There are three main categories of motor insurance that are currently available and these are Third Party only, Third Party Fire and Theft and Comprehensive. The one that you opt for is dependent upon the areas that you feel are most important to you.

Third Party only will cover you against damage to the third party's car or to the third party themselves. If you are ever involved in an accident involving someone else and end up causing damage to that car or if it results in injuries to the occupant of the car, then this policy will pay for the repair to the vehicle and pay for any treatment needed if injuries are suffered by the persons of the other car and any passengers in your car other than you.

A Third Party only policy will not however pay for the costs of repairing your own vehicle or any costs required to cover medical or health expenses if you are injured. It is also worth noting that if your vehicle is stolen or catches fire then a Third Party only policy will not make pay out toward the theft or repair required to the car.

Third Party Fire and Theft cover is essentially the same thing as a Third Party only policy; although in this case a Third Party Fire and Theft policy will also pay out in the event that your vehicle is stolen or set on fire.

If you wish to be covered for all eventualities and want to have greater peace of mind if your car is valuable then you should opt for comprehensive insurance which will provide cover for all of the above.

Car insurance Prices Increase By 5%

Recent figures released show that prices have increased by 5% compared to last year, the main group that has ended up paying considerably more is drivers aged between 40 and 50 who have seen their prices rise by 7%. The average premium for British motorists is now £497.26; however the under-25's have to pay over double this figure and charged an average of £1,255.

Finding cheap car insurance is still attainable despite the increase. One of the best ways to find a better deal is by not being too loyal; customers often accept the renewal quote from the current provider without looking for alternatives. A well known insurer recently showed that Brits were wasting an astonishing £1.9 billion by remaining with their original provider.

Couples can also get a better deal; a joint policy can save a couple around £100. Changing your car plays an important role in the calculating of your motor insurance. All cars are given a rating of 1-20 depending on the cost to repair, the power and the security features. Obviously, a car with a rating of 20 will have a higher premium than a car with a rating of 1. One more thing, although you don't want to leave yourself short, don't throw your money away on extras that you probably will never need.

Whatever deal you find, the increases have made shopping around and comparing various car insurance deals even more important. Shopping online enables customers to find the best deals around and is the easiest and most efficient way of finding the most comprehensive offers. There are ways to reduce the cost of your insurance and in today's financial climate, taking advice can save you hundreds of pounds.

After car insurance prices increased recently, finding the best deal for you is imperative. For the best motor insurance deals, shop online and speed off (not literally!) with cheap car insurance.

Article Source: http://EzineArticles.com/?expert=Karl_Bantleman

Car Insurance Tips to Save You Money

Brits waste thousands of pounds each year on car insurance because they do not understand some of the car insurance tips that could save them money. Car insurance protection is extremely important for the peace of mind of motorists. Car insurance that offers a great combination of coverage benefits at a reasonable price is important.

Car insurance provides a variety of benefits to motorists. Each driver must determine the benefits that are most important to him or her, based on driving habits, needs, and other factors. Some protections are fairly universal, but there are also some specific benefits that may appeal to particular drivers.

Standard car insurance protection includes comprehensive coverage for collisions and liability for situations involving other motorists. These services offer protection to drivers in accidents or situations where the driver is at fault or not at fault. These broad services provide for the typical damage and repair protection a motorist would experience.

There are many other services available for motorists looking for a more customized car insurance protection product. Most car insurance tips include suggestions for certain covers and what benefits they provide. Customized car insurance services include: No claim discounts, courtesy cars, windscreen replacement, emergency roadside assistance, equipment protection, car seat replacement, additional optional benefits to help provide peace of mind to the customer.

No claim discounts are intended to reward motorists with a good history of safe driving. Driving safely is perhaps the most important of the car insurance tips for motorists. Similar to the effect a good credit history has on loan seekers, a good driving history provides less risk to the insurer. Courtesy cars are a great service to allow Brits to meet their driving needs while their car is under repair.

Emergency roadside assistance helps those in need when they are stranded. Roadside assistance costs can be quite expensive, so this protection definitely pays off if needed. Other types of equipment and feature protections are great for motorists wanting to maintain the luxury status with their cars, or looking to protect stereos or equipment. Finally, many optional coves are available to fit the needs of the motorist.

Drivers need to be aware of the great savings opportunities available along with the many standard and customized cover benefits. Along with having a safe driving record, motorists can get better rates by having joint protection. Many motorists fail to take advantage of savings opportunities by combining protection with a live-in mate or spouse.

A car insurance specialist can be a great resource to motorists. A company that can offer great car insurance tips, while assisting Brits with finding the best solutions for their protection needs is a great resource. A specialist can also assist with understand the discounts available as well as the savings opportunities available through setting up a protection plan in the most advantageous way. Car insurance is a necessity for all motorists, but finding the right plan with the right mix of benefits, at a great rate, can be especially satisfying to motorists.