Auto Insurance Revealed – What Are Limits And Deductibles?

February 19, 2018 · Posted in General Articles on Car Insurance · Comment 
auto insurance
Limits and Deductibles are the two components that greatly affect your auto insurance policy premiums. Therefore you can benefit most by understanding what these are. You can also strike a balance between your insurance benefits and your policy premiums by adjusting your Limits and Deductibles.

Definition of Limits and Deductible

A Limit is the maximum amount that an auto insurance company will pay for in the event of an accident.

A Deductible is the amount of money which you (the insured) must pay before the insurance company’s payout begins. For example, a typical auto insurance policy may carry about $500 deductible. If a car owner gets into an accident, he has to foot the first $500 of the damage while the rest of the cost is borne by his insurer.

Insurance companies include a deductible in their auto insurance policy to avoid paying out on relatively small claims. This is only practical as the administrative time and cost of a small claim far outweighs the benefits of payout.

Deductibles also vary by company and type of coverage. Different auto insurance companies offer different deductible options, and the amount you save by selecting a higher deductible will also vary by company.

How Do Limits and Deductible Affect Auto Insurance Premiums?

With higher Limits, your auto insurance company bears a higher risk. This is because the insurance payout is higher — therefore your insurance premiums will increase. Similarly if the Deductibles are lower, the insurance company (instead of the driver) has to pay more when you make claims. Obviously they’ll have to increase the insurance premiums too.

If you feel you need a high level of coverage but want to reduce your premiums, you can save money by opting for higher deductible. However you need to understand that you’ll be paying more out of your pocket in the event of a claim. For this reason, you’re also advised to set aside a similar amount of money so that you can pay for the deductible amount in order for your auto insurance company to compensate you.

Deductible is only characteristic to some types of auto insurance. You’ll only need to decide your deductible options for Personal Injury Protection (PIP), Comprehensive coverage and Collision coverage. Deductibles are not applicable to Liability Insurance, Uninsured Motorist Coverage and Underinsured Motorist Coverage. Therefore there’s no need to evaluate your deductible options for these types of auto insurance policies.

By understanding your auto insurance needs, you’ll be able to derive a plan for policy limits and deductible options. From this, you can easily find a balance between your insurance benefits and what you pay for.

Finally, it may also be helpful to know that you have the right to adjust your auto insurance coverage and policy limits at any time, even if you’re not near your renewal date. If you adjust to a lower policy limit, opt for a different deductible option or cancel non-mandatory coverage, you can (and should) request your insurance company to refund for the unused premiums.

Cheap Car Insurance: Benefits of Being a Law-abiding Motorist

July 16, 2017 · Posted in General Articles on Car Insurance · Comment 
car insurance
You are responsible for taking care of your car and its health and at the same time you must be careful about yourself while driving it. You are getting good comfort and convenience by using your car but do you think about its safety and security. Now, people who take care of their vehicle are opting for cheap car insurance too often.

Generally, most of the people think that they don’t need car insurance because they take good care of it and nothing can happen with it. But this is the tragedy with misfortune that it is unforeseeable. In fact, anything can happen with your car despite of your great care. Your car is susceptible to car theft, vandalism, fire and road accidents. Cheap car insurance is always a good idea to avoid bad implications of any of these misfortunes.

In fact, car insurance is a legal requirement in the UK and it is an absolute minimum before venturing on to the road. You are required by law to have car insurance to cover your potential liability to other road users. The law requires every person using a motor vehicle on the road in the UK, or permitting others to use that vehicle, to be insured against damage by causing personal injuries to third parties. Previously, many drivers were avoiding car insurance due to high premium but now many cheap car insurance plans have come up with great benefits.

Most auto-insurance companies offer three types of cheap car insurance, third party only (TPO), third party, fire and theft and comprehensive car insurance. The TPO plan insures against accidental damage to a third party vehicle and injury to third parties. Third party, fire and theft include all the benefits of third party only with the addition of cover for fire, lightning, explosion, theft, attempted theft and taking without consent. Whereas, fully comprehensive car insurance covers against accidental damage to a third party vehicle and to the policyholder’s car, injury to third parties and liability to passengers in the policyholder’s car.

You also can get various hidden benefits and additional features with cheap car insurance and that is why most of the motorists are opting for it.

By: Allan

About the Author:

Allan Elvin is an MBA in Finance and has a rich experience of writing on topics related to finance. He professes special interest and expertise in cheap car insurance and in guiding you on its various details.

Is it possible to give car insurance benefits to my boyfriend?

May 10, 2017 · Posted in FAQ · 7 Comments 
car insurance
meaniehead16 asked:

Im going out of the country next week, I will not be coming back until the first few days of january. My boyfriend is currently staying at my house and he has no means of transportation. (He is 20 years old, and his car completely broke down–our location is Dallas TX.)

I was wondering if it was possible to “add” him under my father’s car insurance plan, with him being a non-family member.

ANY information is helpful and greately appreciated.

Please, no dumb comments as this is of great importance to us.