When asked to write an article about automotive car insurance I was not quite sure how to fit in all of the information the average consumer would need. The average insurance policy is written in such dense language that many people walk out of the auto insurance agency without any idea of what they have just purchased. With that in mind I will answer a few of the most common questions people have about their policies.
The first thing I have found is that many people are not aware of what their car insurance limits are. Quite simply these are the limits the auto insurance will pay out on a per accident basis. They are typically written like this; 50/100/50. This means the company will pay our $50,000 to one person injured in an accident, $100,000 to all people injured in an accident, and $50,000 in damages to someone else’s property per accident. Any costs that exceed your coverage limit will likely be your responsibility.
The next thing that I am often asked is just how the rates are set. This is a bit tricky because different states have different regulations regarding insurance rates. In most cases the insurance companies set their rates based on several decades worth of auto accident reports. They then figure out if you are statistically likely to be in accident or not and give you a quote based on this information.
The quote is will not be the same from every insurance carrier and this is because they all use different statistical formulas to assign risk. So if one company figures you to be a higher risk than another their quote will be the higher priced of the two. This is why comparison shopping for auto insurance will save you money. The more quotes you request the more likely it is you will get on from a company that feels you are at a lower risk to be an accident.
Automotive car insurance can be tricky, but remember; if you are a savvy consumer who asks all the right questions before a purchase then you will be far likelier to get he best rate that you currently qualify for.