Cheap Car Insurance Isn't Always What It Seems
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Added: 31-01-12
- A Bradford MP has called for a summit on car insurance rates the spiralling costs of car insurance in the city following a quote for one of its constituents for 26,000 to cover his son's car - and only for third party, fire and theft.
1. Age - according to studies, motorists that are 25 years of age and under have higher risk to be in incident compared to those that are over 25 years old. In order to pay reduce car insurance rates; ensure you reapply whenever you reach the age of 50 and 65.
Common frauds include staged accidents where more than often gangs are involved, bogus injury claims - whiplash being the most common and fronting, where parents cut costs by claiming they are the main driver on an insurance policy for their child's car.
It appears that the main problematic factor is that the family lives in a BD2 postcode area - which includes Eccleshill, Undercliffe, Fagley and Bolton. This area has almost double the amount of uninsured drivers compared to the rest of the country.
The above pointed out factors are pretty difficult to control. Let us call them "constants". However, there are things which are in your control. You could have these changed based to fit your car insurance premium budget.
1. Location - If you reside in a region where there is little or no traffic, then you're more likely to pay less insurance coverage compared to those individuals who reside in the metropolitan areas where there is a lot of traffic. If you reside in a community which has a high rate of automobile robbery then you're more likely to pay higher insurance rates.
4. "The color of my car is red and I heard that this will make my payment higher!"
The cost of your car insurance policy is based on your age, sex, zip code, driving history, coverage type, make, model, engine size, the car's safety record and the likelihood of it being stolen.
5. "My credit history has nothing to do with my car insurance rate."
If you know that you're a hayfever sufferer and you take medication, why risk the danger of having an accident and claiming on your cheap car insurance? If you're planning a journey try to take medication that doesn't cause drowsiness or even ask somebody else to drive.
6. "I only need the minimum coverage."
Each state has set the required minimum level of insurance coverage, here in California it is $15,000 per person injured, a maximum of $30,000 per accident and $5,000 property damage liability. These limits are very low. Emergency medical services are very expensive and $5,000 worth of damage can be exhausted in a very minor fender bender between two relatively new vehicles. It is a serious mistake to maintain these low coverage levels. You could face a serious financial collapse if you find yourself paying out for medical bills and property damage as a result of being under-insured. Being under-insured could make you vulnerable if another driver decides to sue after an accident.
7. "Insurance companies make up their prices and charge whatever they want."
Insurance companies are required to describe how the rates are calculated and then the rates must be filed for review and for approval or rejection. Any increases or decreases must be filed through the state of California department of Insurance for a review car insurance rates and then the rate is accepted or rejected.
8. "My insurance covers any car I drive."
Some insurance polices, called broad coverage policies, transfer coverage to a vehicle that is made available to you on an incidental basis. Every policy is different. Some companies only transfer the minimum state liability requirements while others are a true broad coverage policy that transfers your specific liability limits. However, many insurance policies are restricted policies or named-operator insurance policies that only cover the named drivers, everyone else is automatically excluded and coverage is not afforded.
9. "If my car is stolen, my insurance company will pay off the loan."
If you bought GAP Insurance when you bought your vehicle, this is true. However, if you have comprehensive insurance and your car is stolen or totaled in an accident, the insurance company will establish the fair market value of your pre-accident vehicle and pay you the actual cash value. This estimation excludes finance charges, interest rates, licensing fees, taxes and other charges you may have accrued throughout the lifetime of your loan.
10. "My insurance company will pay for my car rental."
Your insurance company will not pay for your car rental unless you have purchased car rental expense. This coverage is car insurance rates typically sold only in conjunction with comprehensive and collision coverage.
It is important to read and understand your insurance policy. It is also important to ask questions and address your concerns to your agent.
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