Buying auto insurance is a highly complex process, whether you are buying it for the first or the 20th time. Having car insurance is essential by law. Moreover, car insurance financially protects you and those around you in a collision.
Every country has the law to impose a hefty fine if someone does not possess a valid vehicle insurance policy. People must look for cheap insurance companies in GA to avoid these huge fines.
Although the internet helps us in comparing insurance offers by different companies and their rates. But still, the insurance world is dark and full of surprises as many companies use unfamiliar terms and conditions. It makes the decision-making process very difficult.
There are some misconceptions and myths that cloud the insurance market. People are not fully aware of that. Here, you can get help understanding the auto insurance industry’s essentials.
The Difference Between Collision And Comprehensive Coverage
The auto insurance industry is a dark place where people get confused about various coverage offered by the insurance companies. It is imperative to understand the type of coverage your insurance company provides.
Comprehensive Coverage: Comprehensive coverage protects you financially from the theft and damages that occur due to fire, flood, vandalism, hail, falling rocks or trees, or hitting a deer. This coverage does not assist in case of collision.
Collision Coverage: As it is clear from the name, this insurance coverage assists the policy-holder in case of an accident or collision with any object such as a tree or vehicle. This coverage pays you for the damages to your car. This coverage also covers damages from potholes or from rolling your car.
Note: Collision Coverage and Comprehensive coverage are optional insurance. To protect yourself financially from injuries, death, or damage caused to another vehicle or property, you must choose Liability insurance.
How Are Prices Determined?
Every company uses different algorithms to calculate the premium rates. But some fundamental aspects of calculating the premium are common in every company. Such as the make and model of the car, driving records, and commuting hours. The insurance providers might consider some more factors.
Your Age, Gender, And Marital Status: Have you ever wondered why an insurance agent asks for your age, gender, and marital status? This question emerged from some accident statistics, as young drivers with less driving experience are more prone to accidents. Other statistics show that most accidents involve male drivers. These are very important factors in deciding annual insurance premiums.
Where You Live: Another factor that plays a crucial role in determining the premium rate is the location of your home. If the policy-holder lives in an urban area with a high crime rate, the possibility of accidents and car theft is high, leading to a high premium. But a policy-holder from a rural area might pay less as a premium as fewer accidents and theft occur.
Your Credit Score: Credit score can also play a vital role in calculating premiums. There are fewer accidents involving a driver with a better credit score. This factor is invalid for many places as only a few companies consider this criterion.