How much auto coverage do I need?
If you're like many people, you might be in an economic pinch these days. Your inclination might be to get the minimum insurance coverage required by law in Ohio. The trouble with minimum coverage is that it might not fully protect you — or your assets — if you're at fault in an accident. It's a better idea to carry more than the minimum coverage unless you are driving an older car with little value and have no assets to protect.
Even though Ohio has minimum requirements for bodily injury liability, it is probably in your best interest to purchase higher limits. If someone else is injured and you're at fault, the minimum liability coverage may not cover the other motorist's medical expenses, in which case he or she will most likely come after your assets. Insurance experts generally recommended that you purchase 100/300 limits of bodily injury liability (meaning $100,000 for one person in an accident and $300,000 for all people injured in one accident). On the other hand, if your personal assets don't amount to much, there's little for another driver to get if he were to sue you. The minimum requirements might actually suit you and will save you some much-needed cash.
Besides various forms of liability insurance, there is collision and comprehensive auto insurance coverage to consider. Collision insurance covers damage to the policyholder's car resulting from running into anything, be it another car, a fire hydrant or a light post. Comprehensive coverage takes care of your car in the case of theft, fire, falling objects, explosions or other unexpected problems.
Collision and comprehensive coverage are required in most lease contracts, and are essential if you own an expensive car. If you're driving a rattletrap, on the other hand, and the sum of your premium and your deductible are close to the value of your vehicle — or if they exceed it — you might want to consider doing without this coverage.
It's easy to resent having to spend money on insurance. But keep in mind that auto insurance will most likely come to your rescue at some point, so it's imperative to purchase a worthwhile policy. Know what coverage you must have and know what additional coverage fits your lifestyle. Then if trouble strikes, you'll be ready.
Back to TopWhat factors affect auto insurance premium?Insurance rates (also known as Insurance premiums) appear to be a vexed
question. It pays to give more consideration, time and effort to shopping for a
better deal when planning to buy suitable Car Insurance policies. Premiums for
the same coverage can vary considerably from carrier to carrier. Therefore, you
are recommended to compare the prices, the coverage and exclusions among
Insurance carriers and learn the factors that affect Auto Insurance rates.
The major determining factors influencing Auto Insurance Rates are the
following:
1. Your age, sex, marital status, driving record and record of prior
claims form reliable ratemaking criteria to define your risk level.
Insurance companies base their rates levels on years of statistical research,
taking into account recent changes as well. According to statistical data,
single males under 25 years of age belong to the highest risk group. The lowest
risk group comprises married, middle-aged, non-smoking females.
Though the index of safe driving tends to vary and change with time, females
are considered to be safer drivers than males, and young male drivers often end
up paying about 40% higher premiums than female drivers. Then, families should
expect their Auto Insurance premiums to increase when they add a new teenager
driver to their policy.
As we all know, a bad reputation is hard to shake, and a good reputation is
hard to maintain. It refers to driving record and driving habits to the full
extent. You can't run away from facts: statistics shows that drivers with
previous serious traffic violations are more likely to have recurring accidents
than drivers with an accident-free record. Consequently, your bad driving record
will take toll on the insurance premiums rates. For drivers with a clean driving
record most Insurance companies will offer special safe driver discounts.
2. Your vehicle (its type and age) makes another important factor that has
its affect on the Car Insurance rates.
Many insurance companies now use their statistical claims data on car makes
and models in order to determine not only Collision coverage rates, but also
Liability and Medical Payments coverage premiums. Cars with a high frequency of
claims, such as sport utility cars and luxury and sports car models usually
involve higher premiums. Larger cars are sometimes associated with lower rates
since they tend to be safer in collisions. Then, lower-priced sedans normally
cost less to repair and to replace, which leads to somewhat lower rates for
their owners as well.
Restraint systems such as seat belts and airbags, now standard on all new car
makes and models, tend to reduce the risk of injury, and are also regarded as
one of the important factors in determining future premiums, for example Medical
Payments coverage.
3. The way you use your car also affects Auto Insurance rates.
Incessant statistics shows that high annual mileage means greater chances of
being involved in a car accident. Many insurance companies use 12,000 miles per
year as the average mileage, and higher rates conduce to higher premiums. It
refers to vehicles used for business and cars driven to and from work on a daily
basis. These cars are more likely to get in crashes than those driven
occasionally for pleasure, since they face heavier traffic conditions.
If you are a farmer and your vehicle is seldom driven in city heavy traffic,
you will most probably get lower rates when purchasing Auto Insurance policy.
Some drivers who choose to take part in a special voluntary program
experimenting with establishing premiums based on how much and under what
conditions you drive, are known to get rate reductions of about 25%. The insurer
can monitor the driving habits of the car owner by means of a tracking device
mounted to the insured person's car. The device uses satellite and cellular
phone technologies and shows the daily mileage as well as what time of day the
car is driven most.
4. The area you live in also gives Insurance companies ground to judge
about chances of exposure to accidents and base their Insurance rates
accordingly.
Urban areas and densely populated areas invoke higher rates since they are
notorious for high theft and accident claims. The number of passenger cars per
square mile is also an important indicator of chances to file an insurance claim
for collision, injury, car damage or theft.
Statistical data shows that over 80% of traffic accidents occurred within 25
miles of drivers' residence area. Road conditions, traffic patterns, traffic law
enforcement, local costs of auto repairs, hospital and medical services, - all
these factors are taken into account by Insurance companies when compiling
claims record. Insurance companies can have many rating territories across the
state and different rates for each city of a county.
Back to TopHow much homeowners insurance do I need?
You need enough insurance to cover the following:
- The structure of your home.
- Your personal possessions.
- The cost of additional living expenses if your home is damaged and you have to live elsewhere during repairs.
- Your liability to others.
The structure
You need enough insurance to cover the cost of rebuilding your home at current construction costs. Don't include the cost of the land. And don't base your rebuilding costs on the price you paid for your home. The cost of rebuilding could be more or less than the price you paid or could sell it for today.
For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local building costs per square foot. To find out construction costs in your community, call your local real estate agent, builders association or us.
Factors that will determine the cost of rebuilding your home:
- Local construction costs
- The square footage of the structure
- The type of exterior wall construction–frame, masonry (brick or stone) or veneer
- The style of the house (ranch, colonial)
- The number of bathrooms and other rooms
- The type of roof and materials used
- Other structures on the premises such as garages, sheds
- Fireplaces, exterior trim and other special features like arched windows
- Whether the house, or parts of it like the kitchen, was custom built
- Improvement to your home–adding a second bathroom, enlarging the kitchen or other additions that have added value to your home
Standard homeowners policies provide coverage for disasters such as damage due to fire, lightning, hail, explosions and theft. They do not cover floods, earthquakes or damage caused by lack of routine maintenance.
Your personal possessions
Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 percent to 70 percent of the amount of insurance you have on the structure or “dwelling” of your home. The limits of the policy typically appear on the Declarations Page under Section I, Coverages, A. Dwelling.
To determine if this is enough coverage, you need to conduct a home inventory. This is a detailed list of everything you own and information related to the cost to replace these items if they were stolen or destroyed by a disaster such as a fire. If you think you need more coverage, contact your agent or insurance company representative and ask for higher limits for your personal possessions.
Insuring expensive items with floaters/endorsements
There may be limits on how much coverage you get for expensive items such as jewelry, silverware and furs. Generally, there is a limit on jewelry for $1,000 to $2,000. You should ask your agent or look it up in your policy. This information is in Section I, Personal Property, Special Limits of Liability. Insurance companies may also place a limit on what they will pay for computers.
If the limits are too low, consider buying a special personal property floater or an endorsement. These allow you to insure these items individually or as a collection. With floaters and endorsements, there is no deductible. You are charged a premium based on what the item (or collection) is, its dollar value and where you live.
You can determine the value by providing us with a recent receipt or getting the item or collection appraised.
Additional living expenses after a disaster
This is a very important feature of a standard homeowners insurance policy. This pays the additional costs of temporarily living away from your home if you can't live in it due to a fire, severe storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt.
Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20% of the insurance on your house. Some companies will even sell you a policy that provides you with an unlimited amount of loss of use coverage, for a limited amount of time.
You should talk to Thompson & Hummel Insurance to make sure you know exactly how much coverage you have and how long the coverage will be in effect. In most cases, you can increase this coverage for an additional premium.
Liability to others
This part of your policy covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by pets. It pays for both the cost of defending you in court and for any damages a court rules you must pay.
Generally, most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available. Increasingly, it is recommended that homeowners consider purchasing at least $300,000 to $500,000 worth of coverage of liability protection.
Umbrella or Excess Liability.
You should buy enough liability insurance to protect your assets. If you own property and or have investments and savings that are worth more than the liability limits in your policy, you may consider purchasing an excess liability or umbrella policy.
Umbrella or excess liability policies provide extra coverage. They start to pay after you have used up the liability insurance in your underlying home (or auto) policy. An umbrella policy is not part of your homeowners policy. You have to purchase it separately. In addition to providing a higher dollar amount, they offer broader coverage. You are covered for libel, slander, and invasion of privacy. These things are not covered under standard homeowners or auto policies.
The cost of an umbrella policy depends on how much underlying insurance you have and the kind of risk you represent. The greater the underlying liability coverage, the cheaper the policy. This is becaue you would be the less likely to need the additional insurance. Most companies will require a minimum of $300,000 or $500,000 on your home and your car, if you own one.
Back to TopWhat factors can affect homeowners insurance premiums?The following factors can affect your homeowners insurance premium:
Home Features and Characteristics — Your home's age, type of structure, wiring, roof, garage, etc., can affect your homeowners insurance premium. Older homes can often cost more to insure, and those costs can differ depending on whether your home is brick, frame, stone or has synthetic siding.
Location — Where your home is located can change your homeowners insurance premium. For instance, your home insurance rate can be affected if your home is in close proximity to a fire station; is exposed to extreme weather, such as hurricanes, tornadoes or earthquakes; or is in a neighborhood more prone to theft.
Protective Devices — Burglar alarm systems, smoke detectors, fire extinguishers, sprinkler systems and deadbolt locks can lower your homeowners insurance premium.
Personal Factors — What you do can affect your homeowners insurance premium, too. For instance, smokers may pay more for home insurance than nonsmokers. A good credit history also can lower what you pay for home insurance.
Claims History — If you have a history of claims on a homeowners insurance policy, you may pay a higher premium.
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