I’m Buying a Cheap, Used Car. Do I Need to Insure It?

Purchasing a cheap, used car is a great idea for individuals who are on a budget and looking to save money. However, it is still mandatory that, in order to drive the vehicle on public roads in the United States of America, the vehicle needs to be insured by an auto insurance company. Some individuals may choose still to not insure their vehicles, even though the laws of their state mandate that they have current auto insurance coverage on their vehicle(s) in operation. These people may be subject to heavy fines and penalties for operating their vehicles without insurance coverage in the event that they are caught without insurance.

There are a number of things for which a vehicle needs to be insured. It is not just a case of insuring the driver and the vehicle in the case of an accident damaging the vehicle. If this were the case, many people would be able to get away without having insurance since, to this extent, as long as they stayed out of accidents that were their fault, drivers could avoid any damages that may occur. Unless one of these mishaps occurs or an individual is pulled over, it would not be likely that the issue of insurance would come to the attention of law enforcement. However, individuals that do choose to drive without being properly insured are taking a huge risk. In addition to vehicle accidents, there are a number of other problems for which an individual’s insurance may be applicable.

Vehicles can also be insured against theft, fire, accident damage and third party use. Individuals do not need to insure their cars against all different types of damages or accidents. In general, individuals can choose between having comprehensive or liability insurance coverage. Deciding between which insurance coverage would be best for you as an individual can be more easily begun by first determining which type of auto insurance is affordable to you. Once you determine the insurance you need to have, you can begin to explore whether or not any additional coverage would be beneficial in your life.

Liability coverage covers damage caused to other people. This can include not just their property, but their body as well. Medical liability helps to ensure that the cost of a person’s medical costs andor their death will be met. Comprehensive coverage extends to your own vehicle and the property of other people. Collision coverage ensures that your car and other vehicles involved in the collision are covered in the event that they are damaged and you are found to be the cause. Underinsured motorist property damage pays for the costs in the event that the liability insurance coverage had by the negligent driver is not enough. Regardless of the type of insurance that an individuals chooses to have, the laws of the United States of America do require drivers to insure their vehicles prior to taking them out on the road. Individuals who do not insure their vehicles, or who allow their insurance to lapse, can bring problems down upon themselves if they are ever caught in a situation where they need to, but cannot, provide proof of insurance.

How To Slash Your Car Insurance Costs Up To 54% In 10 Easy Steps – Part 1

How much do you pay for Car Insurance every year?

Eight hundred pounds a year? One thousand? Two thousand?

Whatever the amount you’re paying now, you can slash that amount by more than 50% by simply following a few simple strategies.

Can you cut your car insurance costs by investing only 30 seconds of your time? No, that can’t be done.

But if you’re willing to spend 30 minutes today, this week, or next, I’ll show you how to save up to 6,000 on your Car Insurance over the next 10 years.

Okay, here we go. Grab your Car Insurance declarations page (the page in your policy that details all the coverages you’re paying for) and follow along. Make sure you take some notes. If you don’t have your policy, or can’t find it, call your car insurance company and get one – they’ll send it to you pronto.

STRATEGY 1 – Make sure you’re getting all applicable discounts for your vehicles safety features, such as:

- Front, Side or Head Curtain Air Bags;
- Automatic Seat Belts;
- Anti-Theft Alarms or Tracking;
- ABS or Traction Control….and many more.

Think about the safety features you have….and write them down.

STRATEGY 2 – Review & Change Deductibles For Comp & Collision.

Most Car Insurance Policies have two deductibles – one for “collision” (you hit someone or someone hits you) and one for “Comprehensive” (all other damage or loss).

For both of these, have at least a 500 deductible – preferably a 1000 deductible.

Here’s why – If you are currently paying a 100 – 250 deductible, you’ll save up to 40% per year on your monthly premiums by moving it to 500. That means if you’re currently spending 1,000 a year on insurance, you’re going to get to keep 400 every year. If you jump to a 1,000 deductible, you could keep almost 600 extra a year in your pocket.

I can hear some of you saying, “Wow, a 1,000 deductible. That’s a lot of money.” Yes, it is.

So is paying 1,000 a year with that 100 deductible….versus 400 a year with a 1,000 deductible.

The odds are in your favor – go with the 1,000 deductible.

STRATEGY 3 – Review & Change Property Damage Liability.

Have you ever seen a 100,000 mailbox? Car Insurance Companies must have. Here’s why….

Property damage is not damage done to an automobile but rather “property” like a mailbox or a utility pole. So, why in the world would you need 100,000 pounds of coverage?

In most cases, almost 100% of all property damage claims can be taken care of with only 50,000 of coverage. So take a look at your policy to find out what you’re currently paying for. And if you have little or no Net Worth, drop your coverage even lower – to 25,000 or your States minimum. You can find your States minimum by doing a Google search for “car insurance state minimums.”

Here’s what to look for on your policy – Many will have your liability coverage’s listed like so – 50100100 – The first two numbers refer to bodily injury liability coverage. The 1st number is the pound figure covered per person. The 2nd is the pound figure per accident.

The 3rd number is the “Property Damage Liability.” That’s what you need to change. What does yours say?

STRATEGY 4 – Review & Change Bodily Injury Liability.

Although Bodily Injury Liability Coverage is a must, almost all of us end-up overpaying for the coverage we need. This type of coverage specifically covers:

- Any and all occupants of an automobile, whether it’s yours or someone else’s;
- Any and all occupants of another vehicle;
- And Pedestrians

Your only goal with this type of coverage is to have just enough protection to protect what is yours….in other words, your assets. And in order to protect your assets, you need to figure out what your Net Worth is – here’s a well known site for calculating your net worth – www.kiplinger.compersonalfinancetoolsnetworth.html?

A great way to slash your premiums is to have no more in bodily injury liability than what your net worth is. Here’s a common example of the coverage most people have – If your net worth is only 20,000 and you have 100,000 in coverage, you’re throwing money away.

And if you have little, or negative net worth, just get the required State minimums. You’ll need this info to get the lowest car insurance rates. Again, you can get see your state minimums by Googling “car insurance state minimums.”

Here’s what to look for when trying to figure out how much coverage you have now. As I said earlier, most Policies today have your liability coverage’s listed like so – 50100100 – The first two numbers (whatever they might be) refer to bodily injury liability coverage. In this example, there is 50,000 in coverage per person and 100,000 per accident.

What does your policy say? Are you paying more than your net worth? If so, change it.

STRATEGY 5 – Review & Change UninsuredUnderinsured Motorist Coverage.

The uninsuredunderinsured motorist coverage is a fantastic deal for car insurance companies….and a lousy one for you. This premium alone can increase your auto insurance by a couple hundred pounds a year.

Most folks think that uninsuredunderinsured coverage is there to get your car repaired if it is hit by someone without insurance….or someone with lousy insurance.

Wrong.

Any damage done to your car is already covered – by the premium you’re already paying for collision.

First things first….check your policy if your paying for uninsuredunderinsured coverage now. If you are, Google “uninsured motorist state requirements” to see if your State requires it.

If it’s not required by your State, cancel it.

If the State you live in does require uninsuredunderinsured coverage, make sure you have the absolute minimum required. These minimums are not advertised, change every couple of years and are very difficult to find. So, here’s how you handle this.

Do a Google search for your State Department of Insurance, go to the “Contact Us” page, find a phone number, then call and ask what the minimums are.

Don’t try looking for it. Finding the minimums listed is almost impossible on most State Web Sites – they’ve buried it so deep you’ll never find it. Just call your State Department of Insurance.

I know it’s a bit of a hassle to get the info yourself. Yet relying on the Insurance Companies to give you the correct information isn’t very wise.

Next Part 2 of How To Slash Your Car Insurance Costs Up To 54% In 10 Easy Steps

Buildings Insurance went up again last year, costing homeowners another 1% a year, taking the average to just over 205 for a year’s insurance. Contents insurance also went up, this time by 2% – now it costs the average homeowner 151 a year. However, some lenders are hiking prices even higher than that Norwich Union for example, raised its prices by a whopping 6% last year.

The question is – why? There’s so much competition out there, you’d expect prices to be falling, not increasing but there are other forces at work, as we go on to discuss.

No 1 the cost of having a house repaired or rebuilt

Labour and building materials are getting more costly, so when the insurance company calculates how much it would cost to rebuild your house, prices are higher. This is due to inflation, and the same thing affects the insurance company and its own operating costs. Wages, bills, office rental all these costs are increasing year on year so of course insurers have to factor these in.

No 2 the weather

The British weather is getting more and more tempestuous, whether it’s due to global warming we are not qualified to say, but it’s a fact that we have been experiencing a lot of extreme weather in the past few years. The 1987 hurricane was a freak occurrence, but flash floods such as the incident in Boscastle, Cornwall, Helmsley in North Yorkshire, and Carlisle are making the headlines on a regular basis. The Association of British Insurers has stated that the average insurance claim due to flood damage could be anything from 15,000 to 30,000, making huge dents into the insurance industry’s profits. In fact, floods cost insurance companies millions every year.

No 3 – Burglary

Claims due to burglary have been going up, now average at around 1,400. The 2 main causes are:

From digital cameras to laptops, game consoles to ipods our houses are full of electronic gadgets with a high value bought new, and a high value resold. Burglars are after these items and it’s hitting the insurance industry where it hurts their pocket.

Burglars pick posh neighbourhoods to ensure they get away with the best items – with expensive items like jewellery for the taking, the value of these kind of claims is increasing.

Insurance companies use statistics relating to a postcode area to calculate premiums for everyone in that area. If your neighbours have suffered subsidence, or your area is near a river which has been known to flood you will have to pay higher premiums. Similarly, if people in your area have been broken into, then it will be assumed that you are at a higher risk of making a burglary claim too.

Having a no-claims discount is a help when it comes to offsetting the annual rise in premiums, but insurance companies cap these discounts once you have 5 years no claims, so you will not get any further discounts.

So is there any way to avoid the rising cost of home and contents insurance?

The first thing you can do is look around for the best deal. Try the Internet for the best deals, because most insurance companies offer a discount, often 10%, for customers that buy online. You will also save if you pay by direct debit. It’s tempting to accept your current insurer’s renewal quote but don’t be fooled the small amount of effort it will take to shop around will pay good dividends. One of the reasons for this is because insurers always offer their best deals to new customers, existing customers are virtually penalised for showing loyalty!

Improving your home security is another good way to reduce premiums while giving you essential peace of mind. Neighbourhood watch schemes, external security lighting, a burglar alarm, security locks on windows, and industry-recognised locks on external doors will make a difference. Obviously these things cost money to install, but they pay for themselves in the long run.

Play the insurance company game and you will always win shop around, be prepared to move insurance company every year, and don’t accept any high prices. There’s always a better deal out there!

People invest a good share of their hard earned money on material assets such as house, automobile etc. So it is quite essential to secure these things and therefore get them insured. Auto insurance is akin to health insurance. Just as the latter compensates for any attack on ones health, similarly the former reimburses for any damage to your vehicle and also for its loss. With the aid of auto insurance you can keep your car in a good shape and even by a new car in case your insured car gets stolen or lost.

There are lots of companies or agencies that offer auto insurance policy. People prefer the policy that provides maximum benefits and demand less premium. The insurance premium of your vehicle is adjudicated by the parameters of safety, repair costs and theft problems etc. So in order to have low premium rates make sure that you consider these crucial factors carefully.

The kind of car you drive or desire to purchase affects the cost of coverage for any physical damage happening to it. Insurance companies (such as CLEAR or Canadian Loss Experience Automobile Rating) analyze a vehicle in terms of its safety records and wear and tear expenditure. If the repair and replacement chances and so expense is quite high, you are required to pay a good amount of premium for your mode of transport. The premium for the cars that have a good design, are carved in a manner that there are less chances of its being stolen and also run fewer risks of damage or impairment is significantly low. So if you really crave for low premiums, be prudent in your choice of vehicle. In case of purchasing a car, try to go with one that has a good efficiency and built, perfect design and that fetches you least trouble.

Besides the physical and mechanical features of the automobile, the amount of attention you pay to it contributes greatly to its insurance and your happiness. In other words it is very essential for the car owner to prevent it from theft as much as he can. Make sure that the locks of your car are working properly especially if it is an old car. In 2000 CLEAR had revealed that old cars were more susceptible to theft than the new ones. It can be because of their debilitating physical condition and lack of heed people pay to these cars.
Alongwith this it is also very important that you drive your vehicle safely and maintain it well.

Apart from these, one who seeks to take an automobile insurance should compare the policies of different companies, make a complete survey of the market first and then decide which policy to take.

For more information about points that should be borne in mind prior to purchasing a vehicle, you can contact the Insurance Bureau of Canada. At the end what is to be considered is the fact that lower claims entail lower premiums and if the car that you desire has a negative record you will definitely end up paying a good amount for it. So do think of the safety, damage and repair costs and also the theft issue regarding in context of your coveted car.