Do You Know About These Basic Things About Auto Insurance?
Posted by murzzysri on October 25th, 2018
Auto insurance is a financial safeguard against damage to your vehicle or injury to you or others. Since it is a little complicated, drivers often don’t know what to expect from the process. Here are a few basic things you need to know about auto insurance:
Auto insurance, in the simplest terms, is a promise from an insurance company to support you financially in unfortunate, unforeseen events that might cause you financial loss or other damage. For this, you pay the insurance company a certain amount of money called premium for a policy that details your coverage i.e mentions who and what is protected. If something happens and your insured vehicle gets damaged, the company is responsible for paying it.
Insurance companies spend billions on advertising every year. However, know that not all companies are the same and have different ways of pricing policies and prefer customers with different kinds of risk profiles to do business with.
There’s an amount that you will be paying (called premium) to the insurance company for your policy coverage. Now, it is the company that will determine what you pay based of different rating factors and statistics, like your age, profession, credit score, where you live, what vehicle you drive, your driving record & accident history, etc. All of the factors would be assigned a certain level of risk to figure out how likely you will file a claim. The lower the risk associated with you, the lower the premiums and vice versa.
The good news is that you can lower your risk and thus, the premium rates in the future. Want to know how? Though you can’t change certain factors like your age, what you can do is drive safely in order to maintain a clean driving record. Make sure there is no lapse between your auto insurance policies, even for a day.
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