Car insurance estimate: How much do you need?
Every car buyer goes through a checklist before buying his or her brand new car. The most important aspect of the list is the auto insurance and the car insurance estimate.
A car insurance policy protects your vehicle as a whole. In exchange for a yearly amount known as the insurance premium, your insurance officer may offer you a variety of auto insurances based on the type of vehicle you own, the amount of coverage you require, and the number of years you wish to have the protection.
When you are involved in a car accident, the cost of the damages to the car is covered by the car insurance you choose; however, this does not include any damage incurred above the overall auto insurance amount.
The IDV, or Insured Declared Value, of your vehicle is used to calculate the value of your auto insurance estimate; the IDV is the maximum amount the insurance company will pay for damages to your car.
The amount of IDV is roughly equals to the car’s market price or the showroom price. As a result, the IDV is not a constant value and changes on a regular basis. When you renew your car insurance after a year, the value of IDV will decrease due to the amount of depreciation charged on it.
What are the damages covered by the car insurance?
The car insurance will not cover all the damages to your car faces, during the life of the insurance. Coverages in the US are usually seen in a cluster of three numbers separated by a dash, for example, 20/50/30 or 100/500/100.
The first two numbers are usually seen for medical coverage. For 100/500/100 the insurance company policy will pay $100,000 per person up to $500,000 combined for all people.
The last number covers damages made to the property, that is any other vehicle or property you hit in an accident.
A comprehensive auto insurance plan will mainly cover the following types of damages:
Liability Coverage:
The coverage, also known as casualty insurance, primarily covers bodily injuries and property damages, such as car damage. The amount of insurance, however, will differ from one jurisdiction to the next.
The insured may also increase the amount of insurance coverage (pre-loss) to cover any losses incurred during the accident.
In the unfortunate event that your car collides with a telephone pole. In such a case, the liability coverage will cover the costs of the pole’s damage. It does not, however, cover any other costs associated with the damage, such as the telephone company’s claim of service disruption.
Bodily coverage protects the insured from potential injury during the accident as well as any third-party damage caused by the accident. The coverage pays for the insured’s legal fees and damages if he or she is sued.
Full Coverage:
Full coverage protects your vehicle against both collision and comprehensive damage. Collision coverage protects the vehicle involved in collisions by either paying for the repair of the damage or paying the cash value of the vehicle if the vehicle is not repairable.
Comprehensive coverage protects the vehicle from damages that are not normally considered collision damages. This coverage covers damage caused by theft, vandalism, or contact with animals.
Additionally, a lot of insurance companies also include ‘Act of God’ damages that is any damage caused by an event or events caused to factors that are beyond human control, such as cyclones, tornado, tsunami etc.
Apart from the main coverages mentioned above, insurance companies in the US also provide the following coverages:
Damages done by uninsured/underinsured motorist (UM/UIM)
Loss of use
GAP coverage.
Lease/Loan Payoff.
Emergency Road Service Coverage.
Mechanical Breakdown Coverage
Custom Parts and Equipment Coverage.
How can you calculate a car insurance estimate?
You can follow these simple steps, to correctly get your car insurance estimate:
Reduce your options before buying an auto.
Determine the amount of coverage you would ideally require. If you buy a new car, you should get insurance that covers both collision and comprehensive damage. This is not required in the case of a used vehicle.
Compare insurance quotes for your vehicle. Different companies will have different insurance costs for your vehicle depending on the type and market price of the model. Comparing the quotes will help you narrow down to the best insurance for your auto.
Make the final choice, based on the comparison chart.
What should your ideal car insurance estimate be?
There are a lot of factors that affect your car insurance estimate. Ideally, you should choose a plan and amount, which cover most of the possible damage that your auto may incur in the lifetime. The amount of insurance you chose typically should be higher than the actual cost of your overall auto.
The ultimate car insurance estimate will ultimately depend on your own choices and individual situation. It is always advisable to look at a wide range of options and companies offering auto insurance after calculating the car insurance estimate. Comparing insurance quotes, and what they cover with each other will ensure you get the most out of your auto insurance.
Looking for the car insurance estimate?
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