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RMC Insurance Services
Auto
Insurance > Questions
What
affects the price of my car insurance?
What you pay for auto insurance varies by company and
by:
What
you buy - Coverages are priced individually so
how much you'll pay depends upon:
(1) How
many coverages you buy, and:
(2) How
much each will pay. Deductibles lower the price by
shifting part of a loss to you.
What
kind of car you drive affects how much you
pay, since coverage on your vehicle depends on its
value. Generally, the more expensive the car, the
more you pay.
Where you drive - Drivers tend to have more
losses if they live where there's a high rate of
accidents or vandalism. Generally, urban drivers
pay more for insurance than those in small towns
or rural areas.
How
much you drive - The chance of an accident
generally increases as driving increases. People
who use their car for business and long-distance
commuting normally pay more than those who drive
less.
Your
age, sex, and marital status. Accident rates
are higher for all drivers under age 25,
especially young males and single males. Insurance
prices in most states reflect these differences.
Your
driving record also affects price. Drivers who
cause accidents generally must pay more than those
who are accident-free for several years.
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What is
car insurance, and why do I need it?
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What
is car insurance?
A car insurance policy is a contract between you
and an insurance company. You pay a premium, and
in exchange, the insurance company promises to pay
for specific car-related financial losses during
the term of the policy.
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Why
do I need it?
In some states, to drive (get license plates) you
must carry:
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Liability coverage to pay for losses you
cause others, or:
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No-fault coverage to pay you and your
passengers for medical and related expenses
caused by injuries from a car accident,
regardless of fault, or
-
Both coverage
Even in
states where coverage isn’t required, drivers must, by
law, be able to pay for losses they may cause others.
Having insurance is the simplest way for most people to
comply. Coverage for vehicle damage usually is
necessary to finance a car.
Without insurance, you risk paying for the full cost
of:
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Any
harm you cause others, or:
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Repairing or replacing your car if it’s damaged or
stolen
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Who is
covered under a car insurance policy?
Your policy usually covers you, your spouse, and other
relatives who live primarily in your household and
others who have permission to drive one of your covered
vehicles.
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What are my coverage and deductible options?
Deductibles
The deductible is the portion of a covered loss that is
your responsibility. The deductible, when applicable,
applies to each covered loss. Although deductibles vary
by state, they are typically available in amounts such
as $100, $250, $500, or $1000.
For example, if you had a $500 deductible, you would
need to pay $500 of the covered loss.
Generally speaking, higher deductibles lower your
premium, but increase the amount you must pay out of
your own pocket if a loss occurs. Ask yourself how much
you are willing to pay in order to save on premium.
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How much car insurance do I need?
Questions to ask yourself and your agent:
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How
high should my liability coverage limits be? No
one can predict exactly how much you would have to
pay if you were to cause an accident. Ask yourself
how you would pay for any damages exceeding your
coverage limits. The higher your limits are, the
more likely your policy will be able to pay all of
the damages.
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How
high or low should my collision and comprehensive
deductibles be? Higher deductibles lower your
premium but increase the amount you must pay out
of your own pocket if a loss occurs. Ask yourself
how much you are willing to pay in order to save
on premium.
-
Should
I carry collision and comprehensive coverage? You
may be required to carry collision or
comprehensive coverage if your vehicle is leased
or financed. As your car's value decreases, you
might consider dropping these coverages and
pocketing the savings on premiums. Consider,
though, if the savings are enough to offset the
risk of footing the entire cost of repairing or
replacing the vehicle.
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RMC Insurance
Services
PO Box 218750
Houston, TX 77218
281.391.8787
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