Just bought a new car? Well, you know what must come after your new purchase: a car insurance policy! It makes a lot of sense to learn about the components of the auto insurance for yourself; you don’t want to be slapped with premium increments just because you failed to read through the terms and conditions stated in your individual auto insurance policy!
As such, we recommend that you at least understand the minimum coverage that is required by your state. This usually consists of a minimum coverage requirement for Personal Injury Protection, Bodily Injury Liability and Property Damage Liability.
However, this article does not deal with these basic requirements of individual auto insurance policies, but rather with the less obvious clauses and terms that you may not even notice. Breakdown coverage, courtesy cars, No-Claims coverage, legal covers, overseas insurance… have you ever even heard of these?
Breakdown coverage means that your insurance company offers roadside assistance to you in events of a breakdown. This usually means that they’ll pay up to a certain amount for the parts that you’ll be replacing when your vehicle breaks down, such as tire replacements or battery replacements. These coverage vary – check with your auto insurer personally.
When getting auto insurance for yourself, understanding this coverage is important if you’re determined to cut down duplicated, unnecessary services provided by your individual auto insurance company. If your vehicle is new, you should note that most new vehicles already come with breakdown coverage! Also, if you are with AAA, you might already be under their own breakdown coverage.
Even if you’ve decided that you need the breakdown coverage provided by your insurer, consider the level of coverage you need. Some policies provide minimal coverage for breakdown – this means that you won’t be able to ask for breakdown assistance if you’re within a certain distance from your home. The age of your car may even deny you of roadside assistance – ask your auto insurer about this before signing anything!
Read Wikipedia’s roadside assistance article for more information.
A courtesy car is a vehicle that is rented out to you if your personal vehicle cannot be driven because of repair works, or if it was damaged beyond repair in an accident.
As a general rule of thumb, the cheaper the auto insurance for yourself, the less probable it is for you to find offers of courtesy cars in your auto insurance policy. Still, you must look through your individual auto insurance policy carefully to make sure of this.
As such, courtesy cars represent a possible service that you might never utilize – especially if you have multiple vehicles in your household. You may be paying higher premiums for a scenario that’ll never happen!
The coverage that you apply for should suit your needs. Ask yourself: if your vehicle is non-functional, do you have any other vehicle that you can use other than a courtesy car? It should be noted that the rental of your auto insurer’s courtesy car might bear hidden charges, especially if the courtesy car belong to an individual outside of your auto insurer’s jurisdiction.
Read our article on rental car reimbursement for more information on courtesy cars.
Overseas Insurance Coverage
Are you a frequent business traveler If so, you might be driving a lot outside of the U.S. If you intend to do so, you should consider whether the auto insurance for yourself includes overseas insurance coverage.
Do note that the overseas insurance coverage might only cover vehicles that have been named. Thus, if you are driving a vehicle registered overseas without the knowledge of your auto insurer, you may not be able to claim repair and damages costs in the event of an accident with the unnamed vehicle.
Also, you might find overseas insurance coverage exorbitantly expensive. Also, your auto insurer might provide only very basic insurance coverage for your foreign vehicles. If that is the case, you might be better off looking for an auto insurance in the foreign country where you are visiting frequently.
Read Yahoo’s Article How To Get Car Insurance While Traveling Overseas for more information.
Your auto insurance coverage may cover a lot of things, but are you sure that everything that they cover is relevant to you and your needs? Always plan what you need first before you contact your favorite auto insurance agent to purchase an auto insurance policy. This additional step in educating yourself will definitely save you on premiums and deductibles!
To learn more about the different types of insurance, please read our article Explaining Automobile Insurance Coverage Types.