Understanding Your Car Insurance
From your gender to your location, various factors influence how much you pay for car insurance. Here's a look at the details that determine your rate along with what you can do to decrease your yearly costs.
Gender and Age
Women and older drivers have statistics to thank for their lower insurance rates. On the whole, men are involved in more severe accidents and incur more DUI charges than female drivers, making them more expensive to insure. Drivers under the age of 25 can also expect to pay higher premiums simply based on data.
Driving and Credit History
The better your driving record, the better your rates tend to be, while traffic violations and accidents can quickly hike up the price you pay per month. Residents in most states can also save money on their car insurance if they have better than average credit, as many insurers use credit-based insurance scores to determine rates.
The age and size of your vehicle also trigger different price points. For example, newer luxury vehicles may incur a higher rate because these tend to be stolen more often. Larger cars are generally considered safer and could bring the price down, but cars with relatively large engines (sports cars, for example) could push premiums higher.
The population density of your city can markedly impact your car insurance premium. People in rural areas usually see lower rates while drivers in busy urban areas see higher ones due to the increased chance of having a collision or experiencing a break-in.
When it comes to your auto insurance, some factors that influence costs are well within your control. Others, unfortunately, are not. Either way, it doesn't hurt to look into available discounts or bundle options that could lower your monthly rate.
Moving Forward After a Car Accident
Unfortunately, most of us will probably be involved in a car accident at some point. Though you may not be able to guess exactly how you'll react to a crash, knowing what to expect can make this unpleasant experience less overwhelming.
What to Do Immediately After the Wreck
Take a few deep breaths to process what's happened. Once you're ready, take the following steps:
- Check to see if anyone is hurt. This includes yourself, your passengers and anyone in the other vehicle. If anyone has been seriously injured, call 911.
- Stay on the scene. Take note of the other vehicle's make and model, and record the license plate number if you can.
- Keep yourself safe. If your car is stopping traffic or is otherwise in a dangerous place, pull to the nearest parking lot or roadside. Turn off your engine and turn on your hazards.
- Document the accident. Exchange insurance information and take a picture of any damage if possible. Later, make sure to file an accident report with the authorities.
- Go home and rest. Then, as soon as you're able, call your insurance company to notify them of the accident.
Coping with an accident isn't just about nursing physical injuries. Your mental health is equally important. Once your doctor clears you for normal activity, check in with yourself.
You may feel a mix of emotions, from shock and disbelief to anger or guilt. Don't hesitate to share the experience with loved ones or a professional counselor. If you're still having trouble feeling comfortable behind the wheel after a few weeks, consider taking a defensive driving course.
Even minor accidents can have serious effects, so give yourself time to recover and ask for help when needed.
Do you need umbrella insurance?
We live in a litigious society, and for most families it would be financially devastating to experience a lawsuit. Want to protect your assets? An umbrella policy could provide the extra coverage you need.
What does an umbrella policy cover?
An umbrella policy provides additional liability protection. If someone sues you, this policy picks up where your homeowners or car insurance coverage leaves off. Coverage includes everything from legal fees to the settlement amounts associated with a lawsuit.
Umbrella insurance also covers litigation prompted by:
- Rental property incidents
- Malicious prosecutions or false arrests
- Defamation of character
- Damages for pain and suffering
Who needs extra coverage?
If you're worried about keeping your existing net worth and future earnings secure, it might be worth looking into an umbrella policy. People with substantial assets often set up umbrella liability insurance to insulate themselves in the event of a lawsuit, but wealthy policyholders aren't the only ones at risk. If you don't have significant assets, the court can target your future earnings to pay off damages.
How much coverage do you need?
Umbrella policy premiums are relatively inexpensive compared to what it would cost to have your assets drained. But the more you have to safeguard, the larger the policy you may need.
To figure out how much coverage you need, first evaluate all savings, retirement accounts and physical property. Next, calculate what the potential loss of your future income would be. Finally, add these figures together to form an idea of your potential coverage amount.
No matter how much you have or don't have, an umbrella policy can help you preserve your current and future wealth. Feel free to reach out if you have any questions.