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6 Must-know Tips For Auto Insurance Owners
#1 - Your Insurance Policy Depends Heavily On The Car You Drive Most people are aware their rates are influenced by the types of cars they drive. However, most people believe this is caused by the color and style. In truth, other factors pay a much larger role. For example, certain makes and models are popular targets for car thieves. As a result, they pose a higher risk of loss for insurers, and thus are more costly to insure. #2 - You May Not Need Expensive Coverage Car insurance is comprised of several types of coverage. Some, like accident benefits coverage, are mandatory throughout Canada (with notable exceptions in Newfoundland and Labrador). Others, such as collision and comprehensive coverage, are optional. They are also expensive, which means you should carefully review whether they are necessary given your needs. Collision coverage protects you from financial loss in the event your vehicle is damaged due to an accident. Comprehensive covers losses that result from non-accident events. These can include natural disasters, vandalism, and theft. If your car is new, these coverages are valuable. If, however, your vehicle is old and worth very little, collision and comprehensive may make little sense. Dropping both may significantly reduce your premiums. #3 - You Might Qualify For Rate-Lowering Discounts Car insurance companies extend a number of discounts to their customers. To be eligible for them, you need to meet specific criteria. For example, is your driving record free of traffic violations and accidents? If so, you may qualify for a "good driver" discount. Have you taken driver education courses, installed an alarm system in your car, or are you a retiree? These, too, might make you eligible for a reduction in your rates. Contact your insurance broker or insurer to check whether you're entitled to these and other discounts. #4 - Your Personal Belongings Are Not Covered If your vehicle is stolen with your personal belongings inside, these items will not be covered by your auto insurance policy. Clothes, golf clubs, laptop, PDAs, and other property are your responsibility. This is the reason many experts suggest buying a property insurance plan. Your auto policy will cover your car (if it is stolen) while your property insurance policy will cover personal items left inside. Many people assume property insurance is only for homeowners. In reality, it provides coverage for anyone who owns property they value. #5 - You Can Probably Afford A Higher Deductible The deductible on your insurance policy represents the amount you are required to pay before your insurer pays the remaining cost. For example, suppose a collision results in $2,000 of damage to your car. If your deductible is $250, you'll need to pay $250 before your insurer covers the remaining $1,750. Most people carry deductibles that are too low. They do so to minimize the amount they'll need to pay out of pocket when they file a claim. The problem here is twofold. First, the odds of being involved in a collision are small. Second, you are "paying" for the low deductible each year through higher premiums. There's a good chance you'll pay more in higher rates than you'll save with a low deductible by the time you finally file a claim. Raise the amount. Given the small likelihood of an accident, most people will save money by doing so. #6 - Car Insurance Rates Vary By Insurer This is the aspect of auto insurance that most surprises consumers. There is a pervasive assumption that rates are similar from company to company. In reality, they vary - sometimes dramatically. When you're searching for an affordable policy that offers the coverage you need, compare quotes from multiple insurers. You'll discover there is often a significant difference between the lowest and highest quotes. For the savvy shopper, this is an opportunity to save money. Few people enjoy thinking about their car insurance coverage; most simply pay their premiums, and hope they will never need it. But it pays to know the above details since they can help you find low-priced coverage that meets your needs. Article Directory: http://www.articledashboard.com Canadians are able to apply for a driver's license when they reach sixteen years of age. Along with the minimum driving age; Canadians have several other rules which they must abide by to drive on our roads. These driving rules might seem complicated, but really they're quite simple. They also affect the price you pay for your auto insurance. Many teenagers get help from their parents, and aren't aware of the car insurance rates they pay. There are many ins and outs in the car insurance world. I'll quickly explain how your rates are calculated, and several discounts currently available in Canada. We'll clarify these points below. You'll receive a crash course on auto insurance as it relates to teenagers. Finally Ready To Drive (Or Are You?) Many adults believe that teens are too young to responsibly handle a motorized vehicle. They argue the age at which teens can legally get behind the wheel should be raised. Most provinces have settled for a graduated licensing system instead. It is believed that this type of system allows new drivers to get experience without undertaking big risks. Every province and territory handles their program differently. Ontario has two stages before the standard G license. These are called G1 and G2. You're required to hold the G1 license for twenty months before graduating (by passing a test) to a G2 license. Saskatchewan drivers have a similar three stage system. In the Saskatchewan driving system, good drivers can pass through all levels in eighteen months total. Insurance companies keep a careful eye of your progress as you move through the graduated licensing system. At The first level of graduated licensing is often cheap because you'll be required to have an experienced driver in the car at all times. Insurance companies perceive you to be a small risk when you're with an experienced driver. Once you graduate, and are able to drive without supervision, your parents' premiums will rise - often, dramatically. Insurance companies have noticed that solo inexperienced drivers get into more accidents. Why Insurers Appear To Target Teen Drivers Many teens believe they're being treated unfairly by their insurance company. After all, premiums are much higher for young drivers. It's important to realize that insurance companies rely heavily on data when calculating rates. Statistically, teens are often involved in accidents, and these claims are often very expensive. Every policyholder is assigned a risk class. In the case of teenagers, the risk is large due to their relative inexperience behind the wheel. Moreover, crash rates tend to be higher for young drivers. Since crashes lead to claims - and for the insurer, an elevated risk of insurance loss - higher rates are applied. Auto insurers don't "target" teens with higher rates simply due to age. Instead, their rates are based on data that show young drivers - or their moms and dads - file more claims. Keeping Your Auto Insurance Rates Manageable Given the above, how can you keep your premiums at a manageable level? Enrolling and successfully completing an approved driver's education course will help significantly. Insurers consider completion of such a course as an indication of lower risk. They'll lower your parents' rates (assuming you are added to their policy), accordingly. Another key to making sure your premiums stay at a reasonable level is to drive safely (not only during times when your parents are). This is because an accident can cause your rates to rise substantially. This may seem intuitive, but it is important to understand why. If you are involved in a collision, and you are at fault, your insurance company will assume there is a greater likelihood you will cause future accidents. These will result in claims your insurer must pay. Thus, they'll raise your premiums to compensate them for the added risk. Bottom line: drive safely. Learn The Value Of Shopping Around One of the best things you can do to help your parents keep their rates down is to compare quotes side by side from multiple car insurance companies. This will also help you keep your own premiums down when you move to your own policy. You'll be surprised by the difference in quotes offered for the same coverages from one insurer to the next. Comparison shopping is the only way to find the best package for the lowest price. |
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