My Personal Finance Blog

Starting with excessive rates to buying a separate policy for your teen driver, dealing with auto coverage is often confusing, complicated and it also involves a lot of money to be spent. Still, you can’t go around it, as it a legal requirement in most states and a helpful tool to give you a peace of mind when dealing with traffic accidents. Sure, it may seem like a dirty job and you don’t want to waste your time on it. But what if there’s an easier way to get your auto insured without all the hassle you fear of dealing with? If you are interested, read the frequently asked questions below as answered by insurance experts, who know how to get the right policy no matter what’s your situation.

Q: Am I obliged to carry insurance coverage when driving my car?

A: Nearly all states have it as a legal requirement for drivers to carry liability auto coverage as a guarantee that the damages you deliver in a car accidents are paid for. Each state has a minimum amount of liability coverage that a driver must carry with his policy. And even the states that don’t have vehicle insurance as a legal requirement oblige the driver to show proof that he has enough financial resources to pay for the caused damage. Any other types of insurance coverage, outside liability coverage are purely optional and can be purchased with respect to your personal insurance needs.

Q: Is insurance required before buying a new vehicle?

A: If that’s your first vehicle, you will be required to have insurance coverage before even taking it from the dealer. Moreover, if you’re using an auto loan to finance the purchase, you may be required to buy additional types of coverage besides liability. If you already have a car and are changing it to a new one or buying an additional vehicle, you have 14-30 days to report the changes to your insurance company.

Q: How can I get cheap car insurance?

A: Compare insurance quotes in order to see what other providers are offering, and if it turns out that you’re overpaying – switch the provider. If your current rates are quite competitive, compared to other companies, see if you’re taking advantage of all the discounts you can opt for.

When looking for a new car, always make sure that the make and model you are interested in provides cheap car insurance options. Some cars are a lot cheaper to insure than the others, ask your insurance agent to learn what cars are the most cost-effective from the insurance perspective.

Another way to get cheap car insurance, although a bit risky one, is to increase your deductibles. By raising the amount of out-of-pocket expenses you can afford before the policy kicks in you get lower premiums. And if you’re driving an older vehicle that has a low market value, you may want to drop collision and comprehensive coverage as it takes depreciation of the car value into account.

You can also adjust the amounts of coverage your policy carries, although experts do not recommend decreasing them to the level of state minimums as it is usually not enough to pay for a serious accident.

Looking around the US, all but three states mandate drivers to carry liability insurance. Some states have no-fault schemes. Others add in a requirement to buy a personal injury protection policy. As the healthcare reform bill was signed into law, many asked whether all insurance mandates were unconstitutional. This is a fun debating topic which sounds possible but will get nowhere. States have always had the right to impose conditions on people’s voluntary activities. If you want to drive, you have to carry liability insurance to pay compensation to anyone else you may injure. A more interesting question is the amount of the minimum requirements imposed by your state’s lawmakers.

Most of these minimums have not been changed for thirty and more years. For example, in 1972, Maryland set $20,000 for a person injured subject to a maximum of $40,000 for losses arising out of a single traffic accident. This was intended to cover medical treatment, loss of earnings while recovering, and so on. In 1972, the average annual salary was $12,000 and most hospitals charged no more than a few hundred dollars for treatment. Most new vehicles cost less than $4,000 to put on the road. You could easily buy a new home for less than $30,000. Looking back now, you wonder how we managed on so little money. Prices have risen fast for medical treatment. Injure the wrong person and the claim against you for loss of earnings is going to be frightening. Why should this matter?The liability coverage only pays out the minimum. You get to pick up the bill for all the other losses. So any savings or property you have may be taken to satisfy a judgment against you.

Should states increase their minimums? Many are thinking about doing so, but the politics of actually making new laws is difficult. During the recession, people are under financial pressure. Forcing them to spend more on vehicle insurance is not going to be popular among the poorer sections of the electorate. For the middle classes, there is the option to buy more coverage including an uninsured and underinsured policy. This is the American way. Those who have money can use it to protect themselves against losses. Those who are poor must take life as it comes.

In Maryland, the legislators have just increased the minimums to $30,000/60,000. This is curiously unreal. An increase to match the rate of inflation since 1972 should make the minimums $100,000/200,000. But, the political situation does not permit the lawmakers to restore the value of the minimums overnight. The answer was annual increases to inflation-proof the amounts. We would have arrived at $100,000 without anyone being too upset about it. But we have grown used to accepting the cheapest solutions even though millions of people across America actually lose money because of it. Why millions of people? These are all the victims of bad driving who never recover anything more than the minimums and suffer major financial losses as a result. This is injustice on a massive scale. And it will never be cured because it would cost too much to make the necessary increases. The only people who come out of this smiling are the investors in the auto insurance industry. Their profits and dividends have been rising steadily despite the recession. To protect yourself, always get auto insurance quotes from this site to find the most affordable coverage. Insurance may be mandated but you don’t have to pay excessive premiums.

Vehicle accidents can leave devastating effects in its wake, not least financially. NC auto insurance is similar to that of other states. Policies are very simple and law only requires that drivers carry an adequate amount of liability auto insurance.

Liability insurance pays for property damage and bodily injury caused by the driver of the insured vehicle. The minimum required amount of cover is $30,000 for medical expenses incurred by the driver and $60,000 for combined medical expenses of all the occupants in the vehicle. A minimum of $25,000 is required for property damage resulting from an accident caused by the insured driver. Experts recommend a minimum of $100, 000 in individual medical coverage $300,000 in combined medical expenses and $100,000 in property coverage.

Insurance companies are obliged by law to notify the state of lapsed policies. If the problem is not corrected in the period allowed, the policyholder will have to pay fines.

These minimum amounts will not cover all of the expenses that are part of a major accident. Experts recommend all drivers carry 100/300/100 in coverage. Also mandated by the state is that all drivers must carry continuous liability coverage. Every auto insurance company is required to notify the state when a customer fails to renew their policy. When the state knows of the laps of insurance coverage, the policyholder will have a certain number of days to fix the problem or else will have to pay fees.

North Carolina law recommends collision and comprehensive coverage that will pay for damages resulting from a collision caused by the policyholder. If you do not have this coverage, you will be solely responsible for the necessary repairs. In the event of the vehicle being written off, the policyholder will be responsible for the repayment of any lien even if they no longer have the vehicle. Therefore, it is required that any vehicle, which is under lien, also has comprehensive insurance cover.

Uninsured motorist insurance is strongly recommended in North Carolina to help cover damages resulting from an accident involvement with an uninsured driver or a driver with insufficient insurance. If you do not have uninsured motorist insurance, you will be left responsible for paying the medical as well as repair expenses yourself. This could result in costly lawsuits in order to seek compensation from the uninsured motorists personal assets. Uninsured motorists insurance cover is also helpful in the event of a hit and run accident.

Bodily injury liability is mandatory and can be divided into two different parts. It is important to note that this policy does not provide medical cover for the policyholder and other members on the policy. They will require additional cover.

Property damage liability covers the other driver whose car is damaged in a collision where the policyholder is at fault. Property damage can include other vehicles, buildings, fences and lampposts. As with bodily injury liability, this does not apply towards any expenses incurred by the policyholder. The policyholder will have to buy additional cover for their own vehicle.

Many factors can contribute to saving money on your insurance premium. Many aspects play a part in making up your payment. The type of car you drive is one of the most important aspects. A flashy new sports car will be more expensive to insure than a slower, heavier and older car.

The NCDI or North Carolina Department of Insurance can provide you with any specific information you require with regard to your personal insurance needs. NC auto insurance is helpful in dealing with all kinds of damages and losses that arise because of theft, accidents or malicious damage to your car.