Richmond Toyota

Used Car Insurance

Insurance is required for any motorist to drive a vehicle on the road.  Auto insurance is regulated by state governments, and each state has its own insurance commission, which regulates rates and handles complaints. An insurer has to have a state license in order to sell insurance in that state. The main umbrella organization of state insurance commissions is the National Association of Insurance Commissioners (NAIC).  There are many options for auto insurance, from local buisnesses to nation wide companies, and a wide price range(premium) for the service.

What to look for

The price of insurance is often the focal point for used car owners selecting their insurance company. Yet, it is just as important to consider the carrier and the coverage. Quality of service is just as important as price.  You want to sign on with a well-known and established company, one who has the financial strength to pay its claims.  Know beforehand how the company processes their claims, and make sure it is convenient to you.  Ask for references from friends and family about their experiences with the company.

Coverage Types

It is very important to understand what your selected insurance will cover.  There are different parts to your insurance that cover different things:

Liability: This pays for bodily injury or property damage that you become legally responsible for as a result of driving your vehicle. Your liability coverage will not pay for injuries to your own family members in the car.

Comprehensive: This pays for damage to the vehicle caused by non-crash events such as theft, vandalism, striking an animal, storms, etc.

Gap insurance: This coverage provides for the difference between the amount paid under collision or comprehensive coverage to cover a total loss and the amount to pay off the lease or finance contract balance on the vehicle. Many lease or finance contracts include this coverage, but if yours does not you should consider including the coverage on your used car policy.

Collision: This is the part of the policy that pays for the damage to your car caused by a crash, regardless of responsibility.

Uninsured motorist: This covers your damage and personal injury when you're hit by an uninsured motorist.

Medical: This covers you and those in your household if you're a passenger in a car involved in a crash, or if you're a pedestrian struck by a car.  It also pays the initial medical bills for you, members of your family and passengers in your used car. 

What determines the premium

Auto insurers generally bill you every six months, or you can arrange with your insurer to make monthly payments.  A combination of factors determines your premium: How much coverage you want, accidents statistics of your area, theft/safety stats on your used cars model, your driving record, how large a deductible you pay, and how often you drive.  Insurance companies raise premiums when there is an increased posibility for claims.  Here are some of the factors they look at:

Damage Power

If you have a used car, such as a big SUV, that would do the most damage in an accident with other cars, the insurance is likely to go up.  However, larger vehicles tend to be safer in collisions, so this  sometimes offsets costs.

Powerful Engines

You may find that a used car with a particularly powerful engine has a higher premium.  If low insurance rate is important, than go for a smaller, less powerful used car.

Claims History

A main factor for car insurance rates is the claims history.  If the used car you have has a high rate of theft, then you will have a high rate of insurance.  They will charge you more simply because the risk is greater that you'll file a claim and they'll have to pay it. They will also increase your rate on your used car if it is known to be a model that has a high repair rate or is accident prone.

Who You Are

If you're a single male under the age of 25, your are considered accident-prone. Your gender and marital status come into account too.  Married, middle-aged, non-smoking mothers represent the lowest rates.  Where you live may increase your rates, as New York has some of the most expensive in the country. Living in an urban area typically triggers higher rates.  If your driving record is full of at-fault accidents, your premium autimatically goes up.

Imports

Imports, particularly from Europe, have very expensive or hard to find replacement parts. Car insurance companies don't want to pay for parts that are way above the average price. If your used car is an import, you may see higher insurance rates.

Off Roading

Car insurance companies know that off-roading is more likely to cause damage to a vehicle, thus creating a claim. It is often more expensive to insure used cars with four wheel drive.

To find the best coverage, with the best rates it is important to compare prices.  To improve your chances at getting a better rate you should only get coverage for what you need, pay a higher deductible, drive safely, and find a used vehicle with low theft rates, high safety rates, less powerful engine, and a domestic model.