When you purchase a vehicle, whether new or used, you assume a great deal of responsibility. This responsibility includes care of the car, repayment of the loan, and accountability to the public. Should you become involved in an accident, you may be liable for injuries to others or for damage to their property.
An insurance policy is an agreement between yourself and the insurance company which spells out each party's obligations and benefits. It specifies exactly what is covered by the policy and what payment is expected in return.
All states require you to be financially responsible when driving a car. Depending on your state, you may be required to purchase auto insurance or post a bond. State law (and/or your lender) often requires you to purchase at least a minimum amount of auto insurance.
Choosing a Policy
Coverage and cost can differ significantly from company to company. Make sure you compare the various policies offered before you make your decision.
This is a good time to evaluate any existing coverage you may already have. Your needs may have changed and it might be a good idea to increase coverage in certain areas or even purchase a new policy entirely. Here are some events that may signal time for a review:
- Your annual policy is up for renewal - a good time to evaluate and shop for a better price
- Your marital status changes
- The value of your assets increase - without enough liability insurance, your home or other assets could be seized to pay a judgment against you.
- Your net worth increases
- Buying a new or additional vehicle
- You add a youthful driver
Compare policy terms and conditions among different companies. Evaluate coverage, exclusions, and the reputation of the various firms. Be sure you compare apples to apples by evaluating similar policies. Pay attention to price, limits of liability, and deductibles. Is the cost within your budget? Make sure to contact the insurance experts at 1st Source Insurance
for answers to your questions. You can dial (574) 271-5200
or 800 510-4102
to speak to an insurance agent during regular business hours. Types of Insurance Coverage
To make an educated choice when insuring your vehicle, learn about the different types of coverage and what they mean.
- Collision - This type of coverage is used to pay for damages to your vehicle resulting from a collision with another vehicle or object. When the accident is your fault, this is the coverage that is called upon.
- Comprehensive - Comprehensive shields you from events such as fire, theft, floods, vandalism, glass claims and accidents involving an animal.
- Uninsured or Underinsured Motorists - This type of coverage shields you when you are involved in an accident with a motorist that has no insurance or too little insurance to cover all of the damages you have incurred.
- No-fault Insurance - Pays for damages no matter who is at fault, hence the name. Insurance in most no-fault states covers medical, rehabilitation, loss of pay from work, funeral expenses, and other costs to your family or passengers in your vehicle.
- Property Damage - Liability covers only the damage caused by you to someone else's car, fence, lawn, house, etc. When you are at fault in a wreck, this coverage is invoked when the other party makes a claim against your insurance to repair their damages.
- Bodily Injury Liability - This protects you in the event you are obligated to pay claims due to physical injury to individuals harmed by the accident. It also pays for costs associated with your legal defense. There are usually two numbers connected with this coverage; one amount limits payments to a single person per accident and another which limits the total amount for all people injured per accident.
- Medical - This pays for medical expenses associated with an accident. It covers you and any party in your car no matter who is at fault. It also provides coverage for you while you are a passenger in another vehicle or as a pedestrian.
- Car Rental - If your vehicle is in the shop due to a covered claim and you need a car, this coverage will pay for a rental. Most policies will reimburse you $20.00 per day or more, usually up to 30 days.
- Full Glass - Some states don't have a deductible in the case of windshield breakage because it's illegal to drive when it's damaged. Any other window in the vehicle, however, is subject to the deductible. Full glass coverage will pay for 100% of any window that breaks.
- Towing - Pays some or all of the cost to have your vehicle towed when disabled.
How To Save Money On Auto Insurance
Insurance is one of the major costs associated with owning and operating a motor vehicle. Your goal should be to purchase insurance with adequate liability limits at the most competitive premium. You may be able to save money depending on your age, marital status, or driving record. Here are some additional ideas that will help you get the most for your money.
- You probably shopped around before you decided which car to buy; do the same with insurance. The cost of identical policies can vary greatly from company to company.
- It's possible to save up to 10% on your premium costs if you increase the deductible. But make sure you have the financial resources to pay the deductible should you need to. Also, check with the bank first. Many banks, including 1st Source, require you to have a $500 deductible. If you raise your deductible to $1,000 you may not be able to get the loan.
- You may want to limit the scope of your coverage. Most states require mandatory liability, but other physical damage coverage may be expendable. Be very careful here, the last thing you want to do is end up with inadequate coverage.
- Another area of savings can be the amount your policy will pay for a claim. Never skimp on liability, but you might be able to alter your deductibles to achieve premium reductions. Still, be very careful that you don't find yourself in a situation where you don't have enough; talk it over with a 1st Source Insurance expert first.
- If you're a safe driver, which usually means three years with no tickets or accidents, you may qualify for additional savings on different types of coverage. The insurance company will let you know.
- Many insurance companies offer multiple-policy discounts. For example, if you have a homeowner's or renter's policy with the same company, check to see if you can get a discount on your vehicle insurance.
- The kind of car you drive can make a big difference in the premiums you pay. Insuring vehicles that are high performance or very expensive translates into bigger premiums.
- Cars or trucks parked in a garage at night are less subject to theft. If you keep your vehicle in a garage, you may be eligible for a discount. Some companies may also charge less if you have an anti-theft device installed.
- Other discounts may be available if you meet certain criteria, so ask your agent. Examples include discounts for participating in a car pool, being over 50 years of age, and having a covered child with good grades, or who attends school at least 100 miles away and does not have a car at school.
When you call the insurance experts at 1st Source you can get the answers to these questions and more. Just call
(574) 271-5200 or toll-free 800 510-4102.
Insurance products and annuities are not insured by the FDIC or by any other government agency, are not deposits or obligations of, or guaranteed by 1st Source Bank, and may involve investment risk, including loss of principal.