Understanding Your Car insurance Policies

Liability Insurance
If you’re found at fault in an accident, liability insurance pays for the injury and property damage expenses of the third party involved in the accident. Property damage pays for the replacement or repair of anything that was damaged. Bodily injury expenses cover lost wages and medical bills. If you cause a major accident, your current or potential coverage may not cover you sufficiently. It is a safe bet to buy more than the minimum required by your state. Search the lowest car insurance rates at www.everyinsurancerate.com

Collision Coverage
If you’re found at fault in a car accident, collision coverage will cover expenses needed to repair your vehicle. Collision coverage is usually the most expensive component of an auto insurance policy and is optional.  Insurance companies might proclaim your car a “total loss” if the repairs exceed the market value of the car. When this occurs, the insurance company will pay you the actual cash value, less the deductable amount you’ve chosen for your policy.

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Actual Cash Value (ACV)
The value of your car when it is damaged or destroyed. Insurance companies subtract the depreciation from the replacement cost to figure the actual cash value.

Depreciation
Decrease in value because of age/wear on vehicle.

Replacement Cost
The amount required to replace your car or repair damages without considering depreciation.
In most cases, it’s better to choose replacement cost coverage. Although higher in price, the protection may be worth it.

Comprehensive
Comprehensive insurance coverage will pay for damages to your vehicle that were not caused by an accident. This includes fire, vandalism, theft, natural disaster, and even animals. Depending on the damage, the insurance company will pay the cars worth right before the incident. This is also optional coverage.

Ways to Lower Your Car Insurance Payments

1. Shop Around

Prices vary for car insurance from company to company, so it pays to shop around. Get at least three online insurance price quotes. You can call companies directly or access information on the Internet at everyinsurancerate.com. You buy insurance to protect you financially and provide peace of mind. It’s important to pick a company that is financially stable. Don’t shop price alone. Ask friends and relatives for their recommendations.

2. Compare Insurance Costs

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include daytime running lights and anti-theft devices.

3. Ask for Higher Deductibles

Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

4. Reduce Coverage

Consider dropping collision and/or comprehensive coverage on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Car dealers and banks can tell you the worth of cars.

5. Homeowners and Auto Coverage from the Same Insurer

Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for long-time customers.

6. Maintain a Good Credit Record

Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price auto insurance policies. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible.

7. Low Mileage Discounts

Some companies offer discounts to motorists who drive a lower than average number of miles a year. Low mileage discounts can also apply to drivers who car pool to work.

8. Group Insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups, or other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

9. Seek Out Other Discounts

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course.

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