• The Cost of Car Insurance and the Options That Go with it

    Automobile insurance is something that everyone who drives must have, and the question you may have is how much is car insurance going to cost. This is dependent upon the type of vehicle being insured and the driver. The price of the insurance, also known as the premium, is determined by a variety of reasons and some include; vehicle type, the neighborhood where car is parked at night, driving record, and a few other lesser valued factors.

    Auto insurance can be a very expensive endeavor at times, especially for those with a less than spectacular driving record. This is the single most important factor in relation to the premium calculation.

    Up and Down World of Automobile Insurance Quotes

    There are plenty of ways in to which an insurance company can price their premiums. Demographics play a large role in the assimilation of pertinent and local information for the actuaries to crunch the numbers with. When the insurance companies have come up with a premium for an insurance product, it is then released to the sales representative and the market is tested.

    The Price of Car Insurance

    With everyone watching their wallet, it is of no surprise that the topic of auto insurance prices will eventually come up. The cost of car insurance can range from $30 to over $1,000 monthly. There are a few different times of the year in which the auto insurance premium may be paid. The first is the popular monthly payment which demands payment of the premium or risk cancellation. However, there might be other modes of payment, such as quarterly, semi-annually and even annually, which basically depend on the terms of the insurance policy designated at the outset of the term.

    The Price of Liability Insurance

    Liability insurance specifically covers costs incurred in medical care and treatment of people involved in an auto accident. In cases where there’s an accident, if it is clear who the person responsible for the accident is, then they have to pay the medical costs of everyone in their vehicle as well as everyone in the other vehicle involved. Needless to mention, this can be quite a pretty bundle.

    The cost of liability insurance will depend on the kind of coverage that’s sought. Again, there’s classification based on at-fault accident cases and no-fault accident cases. The premiums on both of these may be the same to begin with. But when a claim is made, the premiums are bound to increase. The increase in premium is lower if the accident is a no-fault case.

    Collision Coverage Costs

    Collision insurance will pay for repairs to your vehicle in the event it is damaged in an accident or due to vandalism. Collision insurance will also pay for the replacement cost of your vehicle if the vehicle is beyond repair. If your insurance company needs to replace your vehicle, they will offer you an amount for the vehicle based on its present market value. While collision insurance is very valuable protection, it is one of the most expensive types of coverage options to add to a policy.

    Insurance policies meant to cover collisions are quite expensive, sometimes even to the tune of $1,000 annually or even more.

    Comprehensive Coverage Costs

    Comprehensive insurance covers damages to your vehicle in the event of fire, flood or a storm. This type of coverage also provides replacement costs for vehicles that are lost or stolen. As with collision insurance, adding comprehensive color coverage to an insurance policy adds significantly to the premium amount.

    Among all the different types of auto insurance available, the comprehensive coverage becomes the most cost-effective to have. This coverage takes care of all different damage aspects of an accident, and the premium is lower because of the clubbing. Most people opt for comprehensive coverage to reduce their overall insurance costs and still get an appreciable amount of coverage when they need it.

    What Are Fractional Premium Fees?

    For anyone buying auto insurance, it’s helpful to know about all of the terms associated with your policy. One of these is fractional premium fees. They may sound complicated, but in fact, the concept of fractional premium fees is really simple.

    Fractional premium fees are just a part of the premium rated according to a portion of the policy period. In other words, if you buy a year policy, and pay half of it every 6 months, that half is a fractional premium fee.

    Why Consider Fractional Premium Fees?

    Though the definition of fractional premium fees is basic, understanding how these fractional charges are used is critical for anyone who is ready to bite the bullet and sign up for an insurance package that is, many times, pretty costly. Auto insurance fees reflect a variety of changing conditions, and that is why knowing about your fractional rates is so important. Auto insurance companies use changing rates to show how they value the risk assessment on you as a driver, on your vehicle, on your neighborhood and on the overall situation that they are providing coverage for. You may see your rates change between payments, or you may not. Check in with your insurance reps and talk about whether your fractional charges are fair for your situation.

    Uninsured Motorist Insurance

    Uninsured motorist insurance is required in many states, and will automatically be offered to you by most insurance agents. This type of coverage pays for repairs to your vehicle as well as medical expenses for you and passengers in your vehicle in the event you are involved in a car accident and the at fault driver has no car insurance.

    Deductible Amount Options

    All car insurance policies will require that some level of deductible be met before paying any claims under the policy. Many car insurance policies come with a standard deductible of $100; however, you may purchase policies with higher deductibles such as $250, $500 and even $1,000. Purchasing a policy with a higher deductible will usually allow you to receive lower insurance premium rates.

    Rental Car Coverage Option

    If you’re involved in a car accident, you may be without your vehicle for several days or several weeks. Rental car coverage in a car insurance policy will pay the cost of a rental car up to a certain amount per day and up to a certain number of days. This type of coverage does add to your premium rate, and if you have a second vehicle—you may want to consider leaving out this cost costly option.

    Roadside Assistance Coverage

    If you commute back and forth on state highways or the interstate, you may want to consider roadside assistance coverage. This type of coverage will allow you to call for assistance should your vehicle breakdown on the side of the road. Not only does this type of coverage usually include towing costs, but may also assist with flat tires, battery jump starts and even providing a couple of gallons of gasoline in some cases.