When signing off on an auto insurance policy, you are going into an agreement with the insurer stipulating that as long as you make your coverage payments, they will pay for treatment, repairs, as well as other damages in case of an automotive incident. Nonetheless, when purchasing a policy for the first time, there may be many questions in the back of your mind, which is good because you want to ask as many questions as possible.
Here are four common questions on this topic.
What Will My Policy Cover?
Auto insurance covers injuries and damages incurred in an incident. However, the extent of coverage is contingent on your unique policy situation, the amount you pay, and other considerations such as the at-fault party. Say you purchase a liability policy. In this case, it will only cover the injuries and damages you cause to other people, their vehicles, and their property. Therefore, you should go for full coverage because it will also take care of your repair expenses.
Is There Something The Policy Won't Cover?
Contrary to popular belief, vehicle insurance will not cover all damages. Rather, it is meant for those damages that are sudden and accidental. Thus, it doesn't cover the inevitable damage that occurs slowly over time. Such damage includes wear and tear, electrical breakdowns, mechanical failure, as well as maintenance problems. Accordingly, if you want to cover such repairs for your car, you should add Mechanical Breakdown Insurance (MBI) to your policy.
What Are The Available Policy Options?
If you are looking into auto insurance, you have undoubtedly come across various coverage options. Each coverage option has its role depending on your budget, type of vehicle, driving habits, and other factors. Common coverage options include comprehensive collision, Personal Injury Protection (PIP), and liability. Even though you can stick to the minimum required coverage in your state, you probably need to have more than one policy to ensure enhanced protection.
How Are The Rates Calculated?
There are several aspects that insurers consider during the calculation of insurance rates. These include your driving record, credit history, age, gender, and location. For example, vehicle owners who are inexperienced drivers or have been involved in car crashes generally pay higher rates. On the other hand, experienced drivers with a clean driving record enjoy better rates.
These are some of the most commonly sought-after questions about auto insurance. With this information at your fingertips, you can compare rates from multiple insurers and purchase a policy that suits your needs and circumstances.