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Car Insurance, The Minefield Explained.

By: CarmelT Baird When choosing your car, whether it is a brand new model or a used car with one or more previous owners, you do take into consideration the many features of the vehicle. Yet when insuring your car, often times this is the last thing you would think of doing. Yes, you do ask firstly what is the cost of insuring the particular car you are about to purchase. We could also be influenced by the savings on premiums offered for low-cost insurance.

Yet, you could be paying more in the long term.

When You Are Liable

The way these low cost insurance policies work is, they have low liability limits, often times these could be as low as $25,000, this could mean if you have an accident and are liable then you could be responsible for paying for the other person, the medical expenses, loss of income and other damages. $25.000 doesn't go far these days so the amount over and above that you would have to pay personally.

Always make sure you have enough cover with your car insurance policy. Check your policy carefully and when you don't understand something or are not sure, seek advice from someone who does know.

Make Your Car Insurance Easier To Understand, Choose An Independent Agent.

Using an insurance agent has it's advantages. Firstly the agent will assess your needs and look into your risk profile so they have a good understanding of where you are at and your car insurance coverage.

Don't get an insurance agent and an insurance sales representative confused. An insurance representative works for a particular insurance company, so they will be recommending that insurance company's policies. Whereas an insurance agent works independently and will find the best car insurance policy from all the insurance companies, the one that will best fit your needs.

There are a some things you will need to discuss with your insurance agent for your car insurance and these are:

What you feel about asset protection and insurance
What you expect if you need to make a claim
Your assets and your net worth

Your Car Needs Replacing After An Accident

An important area of a car insurance policy is the replacement section. Most car insurance policies will cover for total losses on the cash value of your car and not the replacement cost. Depending on the age of your car, you could be at a loss of quite some dollars, as you will have to come up with the difference if you wish to have the same car.

This clause in your policy will depend on the age of your vehicle. Some car insurance policies will cover full replacement if you car is purchased brand new. They will do this for a stated time and then you should make sure you understand what happens after that time. Often companies will do the full replacement for twelve months, there will also be special offers for special car promotions.

If you see that teensy, weensy print at the bottom of an advert "Conditions Apply", be sure you find out exactly what the 'conditions' are.

The insurance policies that pay, after total write-off during the first year, the total purchase price plus all costs, will lock in the car valuation each year after that as set by the industry's standard 'retail' Blue Book.

Look After The Little things

Where you have items covered or not covered in a low-cost car insurance policy, this will be found in the fine print. These items may seem not so important when you first sign your policy. Many things with any insurance policy seem fine until you need to make a claim. This is where your costs can take over. You have been enjoying low premiums and now when you need to claim because of an accident, the costs start to come in.

Many car insurance companies will have in the fine print of your car insurance policy, that you will have to use their specified repairers so to get the repairs done, you will need to comply or pay for them yourself. A specialized car insurance policy could have a clause that enables you to select the repairer yourself without any penalty as far as cost to you goes.

There is an area often overlooked with car insurance policies and that is your personal items that are in your car at the time of an accident. These items will also need to be replaced if your car is a total write-off.

Car Insurance Coverage, How To Choose

To find out about your car insurance coverage, what you are covered for, there is a declarations page in your policy. If you are unsure what it all means, then ask advice from an independent insurance agent, independent means that he doesn't work for any car insurance company and should have your interests as his client, as the first priority.
It is the legal responsibility of the independent insurance agent to provide the proper coverage for their clients.

A car insurance policy is just like a legal document, it has wording that is hard for the lay person to comprehend, so seek out someone who can explain, in plain language, what it all means.