What Do You Mean My Auto Insurance Policy Doesn't Cover This!!

Auto insurance is an agreement between you and your insurance company where you arrange to pay a premium in an exchange for the peace of mind that your insurance agency will pay for vehicle related financial losses during the duration of the policy. You need auto insurance because you are liable by law to pay for losses you cause to others in the event of an automobile accident. Purchasing auto insurance is the surest way to guarantee you will be able to fulfill your end of the bargain. In some states it is required that you have minimum forms of insurance in order to drive. You also must have insurance in order to finance a car.

One of the first questions you will be asked when obtaining automobile insurance is how much of the covered loss or deductible do you want to be your responsibility? You may choose between $100, $250, $500, or $1,000. The higher your deductible the lower your premium however you must keep in mind that the deductible is the amount you must pay before your insurance will assist you. If you cannot afford to pay the first $1,000 of the covered loss you may want to consider how much you can afford and choose a lower deductible.

Your insurance coverage is broken down into each purpose you would need to be covered for. One of the most common coverages include liability which pays out when the insured driver is legally responsible for bodily injuries and property damage they cause to others. Bodily injury damages cover medical expenses, pain and suffering, lost wages and other special damages. Property damage includes damaged property and loss of use. Liability also pays legal defense expenses. Each state has a set minimum amount of coverage you must carry but you may opt for higher amounts.

Personal injury protection pays medical expenses for covered individuals despite who is at fault for the accident. It also covers rehab, lost wages, replacement of services and funeral expenses. Medical payment coverage pays medical and funeral expenses regardless of fault when the causes of these requirements are due to an automobile accident. Collision coverage pays for damage to an insured vehicle caused by collision with another vehicle or object. Your deductible will apply to collision coverage.

Comprehensive coverage pays for loss of or damage to an insured vehicle unless is damaged or lost as the result of a collision. Comprehensive would cover losses due to theft, fire, wind, hail, flood, vandalism or impact with an animal. Your deductible will apply to comprehensive coverage.

Uninsured motorist pays for loss or damage caused by another driver who does not have liability insurance. Underinsured motorist coverage pays when the insured driver is injured in an automobile accident caused by a driver who has an inadequate amount of liability insurance. Rental reimbursement pays rental vehicle costs when your vehicle is put out of commission as the result of an automobile accident. Daily monetary limits may apply. Emergency roadside assistance coverage pays towing expenses when your vehicle breaks down. Distance limits may apply.

Your policy will generally cover you, your spouse children and other family members who reside in your residence as well as anyone else who has permission to drive your covered automobile.

How to Make the Most of Your No-Claims Bonus

Motor insurance premiums can take a pretty big bite out of your pocket when you first start driving. A new, inexperienced driver will pay top price for car insurance - but there are ways to steadily reduce the amount that you pay out in premiums over time.

One of the most important is building up a no claims bonus through your insurer. The longer you can go without making a claim against your policy, the less you'll pay for your insurance premiums over time.

The reason for that is quite simple, really. As a good driver, you're not costing the insurance company money. Going even your first year without an accident or a claim against your insurance can reduce your premiums by 30% in your second year. While there's no standard no-claims bonus, most insurers follow something similar to this:

One year: 30% discount
Two consecutive years: 40% discount
Three consecutive years: 50% discount
Four plus consecutive years: 60% discount

Each consecutive year that you get through without making a claim will reduce your insurance premium further. Typically, you'll reach maximum discount level after five consecutive years of no claims. A discount of 60% is typical, but some insurers may discount it even further.

Holding on to your No Claims Discount

Holding on to your no claims bonus isn't always easy, but there are some ways to preserve the discount to which you're entitled. You may even be able to keep your no claims discount when you move your policy from one insurer to another, as long as you can prove that you're entitled to it.

Bear in mind that third party accidents which are not your fault will usually not affect your discount, as long as their insurance company picks up the costs. Other things that aren't your fault can cause you to lose some or all of your discount, though. If your car is stolen or damaged by events beyond your control and your insurance company picks up the tab, you could lose your discounts.

What's a Step-Back?

Most insurers won't wipe out your no claim discount for a single claim. Typically, they'll step-back your discount, usually by two years. If you have four year bonus, entitling you to a 60% discount, and have an accident for which you make a claim, your discount will probably be cut to the 40% discount you'd receive after two consecutive years without a claim.

Protecting Your Discount

It could be worth avoiding a claim if the costs for repairs aren't much higher than the excess on your insurance policy. If the costs for repairing your vehicle are not much more than what you'd pay when making a claim anyway, it could be more beneficial to just pay and make no claim.

Many insurers will also allow you to pay a little extra to protect your discount, though usually you can only protect your no claims bonus if you've already built up to a full entitlement. Once you've gone six years claim-free, though, you may be able to pay a slightly higher premium to keep your no claims bonus even if there are future claims.

Protected Bonus Cautions

Of course, your discount is applied to your new premium so your no claims bonus only helps a bit. If you've had other claims against the policy, your insurer will probably take that into account when setting your new premium for the year. Your discount will remain intact, but the cost of your insurance could still go up because your premium is higher.

In addition to maximising your no-claims discount, shopping around for motor insurance should be your first priority whether you are a new driver or have just got your renewal documents. To find out which car insurance comparison sites like Tesco Compare and Gocompare quote the most policies, visit http://www.uk-insurance-index.co.uk/car-insurance-companies-1.html

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

How to Make the Most of Your No-Claims Bonus

Motor insurance premiums can take a pretty big bite out of your pocket when you first start driving. A new, inexperienced driver will pay top price for car insurance - but there are ways to steadily reduce the amount that you pay out in premiums over time.

One of the most important is building up a no claims bonus through your insurer. The longer you can go without making a claim against your policy, the less you'll pay for your insurance premiums over time.

The reason for that is quite simple, really. As a good driver, you're not costing the insurance company money. Going even your first year without an accident or a claim against your insurance can reduce your premiums by 30% in your second year. While there's no standard no-claims bonus, most insurers follow something similar to this:

One year: 30% discount
Two consecutive years: 40% discount
Three consecutive years: 50% discount
Four plus consecutive years: 60% discount

Each consecutive year that you get through without making a claim will reduce your insurance premium further. Typically, you'll reach maximum discount level after five consecutive years of no claims. A discount of 60% is typical, but some insurers may discount it even further.

Holding on to your No Claims Discount

Holding on to your no claims bonus isn't always easy, but there are some ways to preserve the discount to which you're entitled. You may even be able to keep your no claims discount when you move your policy from one insurer to another, as long as you can prove that you're entitled to it.

Bear in mind that third party accidents which are not your fault will usually not affect your discount, as long as their insurance company picks up the costs. Other things that aren't your fault can cause you to lose some or all of your discount, though. If your car is stolen or damaged by events beyond your control and your insurance company picks up the tab, you could lose your discounts.

What's a Step-Back?

Most insurers won't wipe out your no claim discount for a single claim. Typically, they'll step-back your discount, usually by two years. If you have four year bonus, entitling you to a 60% discount, and have an accident for which you make a claim, your discount will probably be cut to the 40% discount you'd receive after two consecutive years without a claim.

Protecting Your Discount

It could be worth avoiding a claim if the costs for repairs aren't much higher than the excess on your insurance policy. If the costs for repairing your vehicle are not much more than what you'd pay when making a claim anyway, it could be more beneficial to just pay and make no claim.

Many insurers will also allow you to pay a little extra to protect your discount, though usually you can only protect your no claims bonus if you've already built up to a full entitlement. Once you've gone six years claim-free, though, you may be able to pay a slightly higher premium to keep your no claims bonus even if there are future claims.

Protected Bonus Cautions

Of course, your discount is applied to your new premium so your no claims bonus only helps a bit. If you've had other claims against the policy, your insurer will probably take that into account when setting your new premium for the year. Your discount will remain intact, but the cost of your insurance could still go up because your premium is higher.

In addition to maximising your no-claims discount, shopping around for motor insurance should be your first priority whether you are a new driver or have just got your renewal documents. To find out which car insurance comparison sites like Tesco Compare and Gocompare quote the most policies, visit http://www.uk-insurance-index.co.uk/car-insurance-companies-1.html

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