The Nature Of Driving
Driving is probably the most critical activity we all engage in on a routine basis. Driving is a life and death issue, and every time we drive we risk our own life and limbs, as well as the life and limb of others on the streets and highways. Moreover, driving involves enormous financial responsibility, and every time we drive, millions of dollars and our financial future is at risk. Although we drive so frequently that we take it for granted, we must always remember that it is incredibly risky and we must always drive safely and buying automobile insurance is a very important responsibility. Since, driving is so important, insurance is required in just about every state.
Automobile Insurance Requirements
Since automobile insurance is required, there are penalties for driving without it. Driving without insurance or proof that you have met your state’s financial responsibilities has serious consequences and severe penalties. The penalties vary from state and here are some common penalties:
* Having your driver’s license suspended.
* Suspending your vehicle registration.
* Receiving a traffic ticket for a no insurance violation. This is in addition to the ticket you receive for the original reason the police pulled you over.
* Hefty fines. You will be required to pay hefty fines in addition to the cost of registering your driver’s license or automobile.
Keeping Your Automobile Insurance Current
Obviously we must pay our premiums on time so our policy does not lapse or get canceled. Probably the best option is to pay the premium annually. You need not worry about your policy canceling and many companies will offer reduced prices if the premium is paid a year in advance. The second best option is to pay automatically with your checking account or credit card. Make sure you pay on time and if you cannot, make sure you make arrangements to pay without a lapse in coverage.
Canceling Your Insurance Policy
If you cancel your policy because you sold your car or you bought new insurance, make sure you inform the Department of Motor Vehicles (DMV) so they are aware that you are not driving without insurance. The insurance company will probably inform DMV every time you cancel a policy. If your policy is canceled for lack of payment, make plans to purchase new insurance and inform the DMV about your plans.
Types Of Insurance
This article will describe the major types of automobile insurance.
Liability Insurance
Liability insurance protects you if you are sued in court. Driving is extremely risky and we can be sued in court and lose everything. So we need enough liability insurance to protect ourselves as well as our family’s assets. For example, if you and and your family are worth $500,000 then you should be insured for at least $500,000. If your family was only insured for $100,000 your family could lose just about everything.
Collision Insurance
With collision insurance, the insurance company pays to repair your car. If your car is totaled, the insurance company will pay the book value of the car. This payout will not cover the cost of a brand new car, but will equal the approximate value of the car before the accident.
This is not essential. If the car is older, it may not be worth paying the premiums especially if you can save enough to replace the car. If your car is relatively new and valuable, you probably need this insurance
Comprehensive
This covers damages that are not the result of a traditional accident. This policy will cover just about anything that happens such as theft, weather damage, or even a collision with an animal.
These policies are very nice to have, but they are pricey. This policy might not be worthwhile if the car is relatively old and easy to replace. The premium can be reduced if you have tracking and anti-theft devices installed.
Uninsured Motorist Protection
Many drivers have no insurance or very low liability insurance. When these drivers cause an accident, they do not have the means to pay the bills. This insurance will make up the difference should this happen to you. This insurance is essential given the number of uninsured and under insured drivers that are out there.
Medical/Personal Injury Protection
No matter who is at fault, this insurance will cover your medical bills along with those of your passenger. This insurance is very useful although it is somewhat limited. The problem is that many accidents produce tremendous medical bills, and you still need a good medical insurance policy.
Web Sites
There are numerous web sites that offer advise on how to buy automobile insurance. Edmunds is my favorite web site as I believe they have the most exhaustive and useful information about purchasing automobile insurance.
The world famous Progressive Auto Insurance web site allows one to get competitive quotes from various companies all at one web site.
