Insurance companies have different policies, coverage limits, and exclusions because people have different needs and face different risks. Analyze your needs to help you customize your ideal policy. Consider the following issues when customizing your insurance policy.
Private car insurance comes in several types. Examples include:
Standard Car Insurance
In this case, the insurance company analyses your risk factors and determines your annual premium. Risk factors include car make and model, driving history, and age.
Classic Car Insurance
Classic car insurance requires you to agree on your car's value with the insurance company. This insurance form is for rare cars that are difficult to replace and maintain their value. Examples are antique or limited-edition cars no longer in production.
Usage-based Car Insurance
For this insurance form, the insurance company uses your driving habits to determine your rates. Driving habits include mileage, speed, acceleration, and braking.
Your needs, car, and preference determine the insurance type to purchase. The insurance company policies determine whether it can sell your desired coverage. For example, standard insurance might not be available for your vintage car.
Nearly all states require you to carry liability insurance. The state determines the minimum coverage, but you can increase the maximum coverage as per your carrier's terms and conditions. Insurance companies usually give limits per person, incident, and property damage.
For example, a 25/50/15 policy means a maximum compensation of $25,000 per person, a total bodily injury compensation of $50,000 per accident, and a total property compensation of $15,000 per accident. You pay out of pocket if you cause damages above those limits.
Forms of Coverage and Limits
You also need to determine which coverage to include in addition to mandatory liability. Other forms of coverage to consider include:
The coverage you need depends on your state laws, risk exposure, and preferences. You should also determine the applicable limits for each coverage form.
Lastly, you also determine the deductible for the applicable coverage (some forms of coverage don't have deductibles). The deductible is the money you pay out of pocket if you suffer a covered loss and file a compensation claim.
Insurance companies use deductibles to encourage responsible driving and limit insurance claims. Raising your deductible may lower your premiums since it lowers your insurance company's obligations to you in case of a crash.
Reach out to an insurance company to learn more.
You keep a copy of your insurance policy in your file drawer, but do you know how to read and understand the policy? Having an insurance policy will protect you from losses, but it won't protect you from all losses. To get a better understanding of what your policy will and will not cover, read through this blog. You will learn about all different types of insurance policies and learn the terminology used in the documents that you have read. Hopefully, by the time you have read through the content here, you will know exactly where your insurance policies are lacking so you can make changes.