Even though the car insurance is one of the desired deal one signs or probably the most important one from the point of view of protection against road mishaps, it takes away chunk of your yearly household budget.
There are some tricky decisions involved in car insurance process like, how much insurance should one buy? How much is the adequate coverage and what would be the upper limit? These all are critical doubts and going to give you lot of headache. Following details will help you in figuring out appropriate insurance cover and attractive premium rates;
According to recent data released by Institute of Insurance Information, you must have insurance cover of $100000 tendering protection against the expenses accounting medical treatments to all victims of an accident. Your net worth plays important role in deciding whether you should opt for the additional liability insurance or take an umbrella policy. The cost of insurance coverage and intensity of insurance coverage are completely depending upon the market value of your car. If you have purchased car through finance or lease then you need gap insurance to fulfill the difference between the value of your car and the amount you owe. You must follow due diligence while choosing your deductibles. The higher the deductibles, lower the insurance premium and you need to pay higher amount at the time of claim before recovering the compensation from insurance company.
Apart from you playing vital role in deciding the insurance cover, your insurer will also take into account number of other things to calculate coverage and cost of insurance. The area you live will have strong impact on insurance premium of your car. The zip code of your state has focal point in deciding the cost of your insurance policy and the coverage you are eligible for. Mileage factor also plays a major role in deciding the risk aspect of your car which is ultimately connected to the cost of your car insurance policy. The higher the age of your vehicle, lesser the Insurance Declared Value (IDV) your vehicle has. It is the basic parameter in calculating the other key factors like insurance coverage and premium of the policy. Insurers also verify your credit score before giving the final approval of insurance policy.
The recent statistics has shown that, car insurance premiums are rising continuously over the last few years and they have shown no signs of their slowing down. Obviously, insurance companies attribute these rates to the rise in cost of car repairs and healthcare. So as car insurance premium mounting high, it’s imperative that consumers aware about the factors which insurers use to estimate coverage and premium amount.