Law

5 Facts about Car Insurance Claims

Whether you own a private or public car, experts often advice on protecting your vehicle with as much insurance as you can afford. However, there are several key things that you should know before getting your car insurance.

The most important factor is getting to know the facts pertaining to car insurances. By doing so, you will be able to make wise decisions on what insurance to omit or some of the adjustments you can make that might save you money. Below are several things you should know about car insurances.

  1. The type of vehicle you drive can affect your insurance rates

Of course, expensive vehicles have high insurance rates. Conversely, if your car is easy to maintain, your insurance company will charge you at a lower rate. It is, therefore, necessary to keep insurance costs in mind when purchasing a car. If your car is extremely safe and capable of guaranteeing its occupants the required protection, the insurance company pays less. This means that the quality of your vehicle also contributes to the overall cost of your insurance.

  1. Insurance prices vary from one company to the other

Over the years, there has been an increase in the number of insurance companies. This escalating number resulted into a competition that paved the introduction of new risk access formulas and numerous enticing promotional offers. As a result, it is almost impossible to find two insurance companies offering identical prices for a given policy. Therefore, you should carefully scrutinize and compare insurance companies before choosing your ideal company.

  1. Underwriting process can affect your car insurance rate

After choosing your ideal insurance company, note that these companies employ different criteria when evaluating an insurance application. This process is also known as underwriting. It is automatically done by software behind the scenes. Typically, during the underwriting process, car insurance applicants are placed in groups depending on how much money or claims the company will have to pay in case your vehicle is involved in an accident.

  1. Your driving history can affect your car insurance rate

Some companies will look at your vehicle’s history on the number of accidents you have been involved in and the amount of money you were paid. Normally, they look back 5 years to determine whether they will provide insurance for your vehicle. Although this factor varies from one insurance company to another, it always is necessary to seek the services of an insurance company with positive feedbacks from its customers. A good example of such a company is GEICO. It is rare to find cases of a denied GEICO auto insurance claim, although it doesn’t mean they don’t happen.

  1. Sometimes the best insurance coverages are the cheapest

According to the law, the required liability insurance is very expensive. This is means that your insurance company will be on the hook for hundreds of thousands of dollars in case your vehicle suffers from damage. Therefore, to avoid spending exaggerated amounts on insurance from both parties, insurance companies provide modified policies that will fully cover your vehicle but at a reduced price.

However, carefully consider the benefits offered before making your decision. You might be surprised to find out that companies offering the cheapest policies provide the best coverage.

Although there are many uninsured vehicles on the road, it is always necessary to take extra precautions and provide insurance coverage no matter how much it might cost you. Even so, before you do that, put into consideration the above tips and make a wise decision.