Auto Insurance in the Real World - How to Get the Prices You Want!

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Auto Insurance in the Real World - How to Get the Prices You Want!
By Nicholas Vernon

The contemporary world, the prices of almost all products are very high, which also include auto insurance. Due to the current financial crisis, people are struggling to cope with raising cost of all products! This is why almost all the people are being very careful when they are in need of spending their money. This makes all individuals of the middle and lower class to shop very carefully when they go for shopping. It becomes very difficult for the middle class people since they would like to use some luxury items such as car. They feel very comfortable with cars since the public transport becomes inconvenient and expensive too.

All the individuals like to have their own vehicle; however, if an individual has a vehicle, he/she should pay for auto insurance policy every year, which may be a burden to them if he/she did not choose a right auto insurance policy. To keep the auto insurance premium lesser, people should plan before they buy their cars. If they go for a costly car, they need to pay higher premium and if they go for a less expensive car, their annual auto insurance premium will be lesser.

If you are a salaried person, you should be very careful when you are purchasing a car. Before you buy a car, you must calculate your routine monthly expenditure against your salary - based on the fund available, you should be your annual auto insurance premium. Therefore, it is better to go for some cheaper cars if you do not have sufficient monthly fund.

The other biggest problem in paying your car insurance premium happens if you have purchased your vehicle with the help of a car loan. If you have purchased your car using a car loan, you must pay monthly installment; therefore, sometimes (usually during the month when you need to pay your auto insurance premium), you may find it very difficult to pay both the monthly installment and the auto insurance premium. This may sometimes make you unable to pay your installment, which may make the car loan provider to take legal action against you - your may be in the condition of either surrendering your vehicle or they may cease your car. To avoid these unpleasant activities, you must plan well before you buy a car.

To lead a debt-free peaceful life, go for less expensive cars or used cars, which require only less expensive auto insurance premiums. Alternatively, before you buy your auto insurance, do thorough research to find out better auto insurance providers that are located in your area.

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Article Source: http://EzineArticles.com/?expert=Nicholas_Vernon




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How to Know How Much Auto Insurance You Should Carry

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How to Know How Much Auto Insurance You Should Carry
By Elizabeth Allen

How much automobile insurance should you carry? The answer is easy: as much as you can afford. The primary reason to buy automobile insurance, both liability and uninsured motorist (UM) coverage, is to protect yourself and your assets. Your insurance company will never pay more in damages, to you or to a person you negligently injure, than the dollar amount of the coverage you paid for, no matter how high a verdict there may be either against you or for you. Sound complicated? Let's look at two hypothetical examples regarding liability and underinsurance coverage.

Liability Coverage

If you pay a policy premium for $25,000/50,000 in auto liability insurance coverage[1], this is what could happen if you negligently cause injury to another person in an auto accident and the injured person sues you. With significant injuries and damages, a jury might award the injured person $75,000 (a hypothetical figure). Under these facts, your insurance company would pay the injured plaintiff only $25,000 on your behalf, the amount of coverage you bought[2]. As a result, you could be held liable for payment of the remaining $50,000 yourself! This is a harsh result, I am sure you would agree.

What would happen if you had purchased a larger $100,000/$300,000 policy? Your insurance company would ordinarily pay the injured person the entire judgment amount of $75,000. Consequently, you would not be obligated to pay any part of the judgment yourself. To sum it up, the more insurance coverage you buy the less likely it is that you will ever be called upon to pay any part of a legal judgment against you.

Underinsurance Coverage (UIM)

Your purchase of high insurance limits can also help you or your family members when one or more of you are injured through the fault of another driver. This might occur if you and/or relatives who live with you sustain serious injuries in a motor vehicle accident, and the negligent driver who caused the accident has less insurance coverage than you do.

How does this work? As an example, let's say the negligent driver has purchased a $25,000/$50,000 auto liability insurance policy, and you have a policy that provides $100,000/$300,000 in UM coverage. Your injuries are serious. Your medical bills and lost wages are substantial. In your lawsuit against the negligent driver, a jury awards you $100,000 in damages. The defendant driver's insurance will pay you only $25,000, the maximum amount of liability coverage the defendant bought which can be paid to one person with respect to one accident. However, you can look to your own UM coverage to see if there is underinsurance coverage (UIM) available to you. Given the above facts, your insurance company would pay you $75,000 in underinsurance coverage.

How do you arrive at the $75,000 figure? It happens this way. Under Virginia law, if there is UM coverage available to you in an amount greater than the defendant's liability coverage, you will have underinsurance coverage. If not, there will be no underinsurance for you[3]. The availability of underinsurance coverage depends on a comparison between a specific defendant's liability coverage and the UM policy or policies which provide you coverage. With regard to the above example, your own insurance company would pay you $75,000 because that is the amount by which your own UM motorist coverage exceeds the defendant's liability coverage of $25,000. By adding your $75,000 in underinsurance coverage to the defendant's $25,000 liability limits, the $100,000 judgment against you would be paid in full.

However, there would be a different result if there was just one policy available that provided you only $25,000/$50,000 in UM coverage. Under the described facts, your insurance carrier would pay you nothing because your UM insurance coverage of $25,000/$50,000 does not exceed the defendant's own $25,000/$50,000 liability limits. Yes, you can pursue the defendant driver personally through collection proceedings after trial. However, the average defendant has few assets and collecting on a judgment can be a long, expensive, and often futile endeavor. In the end, it is always better to carry high liability/UM insurance limits yourself and ensure that you and your own family are protected in the event one or more of you sustains severe injuries caused by the negligence of a driver with low automobile insurance coverage limits[4].

Footnotes

1. Auto insurance limits of $25,000/$50,000 constitute the minimum amount of auto liability and uninsured motorist coverage you can buy in Virginia. Each state determines its own auto insurance minimum limits; therefore, minimum limits differ from state to state as do laws related to auto insurance. The facts in this article are based on Virginia law only. If you live in another state, you will want to learn about the applicable insurance laws in your own state.

2. When you see a figure like $25,000/$50,000 in relation to an auto policy, it means the limits are "split", that is, one injured person can recover a maximum of $25,000 under the policy while $50,000 is the most coverage the insurance company will pay out to all injured persons regardless of the number of people injured in the same accident or how badly they may be injured.

3. In Virginia, you may be entitled to undersinsured motorist coverage under more than one policy, and these policies can sometimes be "stacked" to give you more coverage. Va. Code - 38.2-2206. This is a complex area of law, and it is wise to consult an attorney to explore whether there is underinsurance in your case.

4. In Virginia, you cannot buy UM coverage in an amount that is higher than your auto liability insurance limits.

Elizabeth M. Allen, of the law firm Allen, Allen, Allen & Allen, has been engaged in the practice of personal injury law for over 30 years. Allen and Allen has been protecting the rights of injured victims in Virginia for nearly a century.

Article Source: http://EzineArticles.com/?expert=Elizabeth_Allen




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