"Cars and Things" (stern0)
09/03/2015 at 16:38 • Filed to: None
0
1|
"Cars and Things" (stern0)
09/03/2015 at 16:38 • Filed to: None | 0
| 1 |
If you’re new to cars, in general, and car ownership, in particular, you’ve probably run across something new and exciting in your foray into the world of new cars. That new something is insurance. Car insurance, while pretty straightforward in concept, is more than a little mind-boggling in practice.
For example, you have liability insurance that is compulsory. At the same time, though, you have comprehensive insurance that sounds like it might be mandatory but it is optional. Rounding out the confusion is collision insurance. Collision, again, sounds like it should be mandatory, but it isn’t. It’s optional – with another but. And into this merry mélange of terms comes the information that some insurance agents (also called brokers) call compulsory liability coverage compulsory, dropping the second half.
Are you confused by now? If so, you are not alone. First-time car buyers tend find this phase of the car-buying process confusing. First-time car buyers can be more than a little bewildered by the terms and choices in front of them. So, what’s the story?
Well, the story is this: In every state, if you want to put a car on the road, you have to do two things after you obtain the vehicle:
1. You have to obtain insurance so that you can venture onto the highways (you can try it without insurance, but, the local constabulary may have a word or two to say about it as you cannot drive uninsured).
2. You have to obtain registration plates to let everyone know that your vehicle is on the road legally (there are many people who do drive unregistered and the local police usually do a pretty good job or corralling scofflaws, eventually).
Finding insurance requires you to go to a broker (also called an agent) who sets you up with the minimum insurance levels that you need to put your vehicle on the road. This is your first step. Your car must have this insurance before you can obtain license plates for the vehicle. In those states where you obtain temporary tags before the Department of Motor Vehicles sends you the plates for your car, you will receive a cardboard or paper plate or plates. Usually good for a month, they are replaced with your new tags when you receive them. You will need proof of insurance, often a form endorsed by the agent of your insurance company, or a computer-generated card or sticker that must either be placed on the windshield.
Remember, liability is, as noted, the only insurance required in all states. It is an extremely variable insurance package. You can keep the premiums low by using low-end coverage. Most states require $10,000/$20,000 – property damage/bodily injuries – at the very minimum. This might have been fine in 1935 when bread cost about 15 cents a loaf and cigarettes were 25 cents for 50 and when the average “big week’s wage” was about $30. It doesn’t make much sense today when court awards can run into the millions, in some cases. Setting a minimum levels of property damage/bodily injury at $100,000/$300,000 or $500,000/$1 million, if you can afford it, is much more realistic.
Understand, too, that while you may take the responsible route of buying higher-than-required liability limits, many drivers opt for the minimums — $10,000/$20,000 — because that is all that is required. These drivers don’t think of the possibility that they may be involved in accidents that will cost them far more. They also seem to forget the fact that if they don’t have the right coverage levels that their homes, cars, bank accounts and other personal assets may be forfeited to pay a court award.
If you are considering your first insurance options, try to envision every possible outcome. Then, when you have figured them out, you will have to square them with the amount you can realistically afford to pay monthly.
As you can see, car insurance, especially if you are a first-time car owner or lessee – lessees must pay car insurance as if they are owners – can become complicated quite quickly. The number of terms you have to absorb, the types of insurance and the various situations you must consider can be quite confusing. To keep the confusion to a minimum, insurance companies employ brokers. Brokers, also called agents, not only sell you insurance, but they are expert at guiding customers through the maze of options available. It can be quite daunting to a first-time car-buyer or lessee to run the gamut of choices available and the rules and regulations that apply to insurance. Since the broker is there to help, make use of his or her services to help cut through the tangled underbrush that can easily ensnare you as you figure things out.
That pretty much wraps up this part of “car insurance buying made easy.” Check out this link for more information on liability insurance: !!!error: Indecipherable SUB-paragraph formatting!!! .
smobgirl
> Cars and Things
09/03/2015 at 22:18 |
|
You left out the hardest part - how to decide when comp/collision are worth it.