Shelter Insurance

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Two factors determine what you pay for auto insurance. The first factor is underwriting and the second factor is rating.

Insurance companies underwrite to assess the risk associated with an applicant, group the applicant with other similar risks and decide if the company will accept the application.Based on the results of the underwriting process, the rating assigns a price based on what the insurer believes it will cost to assume the financial responsibility for the applicant's potential claim.

Your driving record, area in which you live, gender and age, marital status, prior insurance coverage, vehicle use and make and model of your vehicle are common factors that can affect the price you will pay for your auto insurance.

Discounts are awarded because the insurance company sees you as a "better risk."Here are some discounts you should look for: multiple vehicles, driver education courses, good student, safety devices, anti-theft devices, low mileage, good driver/renewal, auto/home package and dividends. Not all states offer all discounts, so check with your agent to see if you qualify.

Each state must implement either a tort system or a no-fault system.The system your state has implemented will determine what kind of insurance is available to you.The three basic coverages sold under the tort system are bodily injury liability insurance, property damage liability insurance and uninsured motorists coverage. In a no-fault state, coverages will vary, but under a no-fault system your insurance company pays you directly for your losses as a result of injuries sustained in an accident, regardless of who is at fault.Check with your state insurance department for questions concerning tort or no-fault state systems.

The most commonly recognized coverages, in addition to the basic liability package, are collision and comprehensive coverages.Collision coverage pays for physical damage to your car as a result of your auto colliding with an object such as a tree or another car. This is relatively expensive coverage and is not required by law.Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. This coverage will also cover broken glass and windshield damage.Comprehensive coverage is less expensive than collision, but is also optional.Other optional coverages include medical payments coverage, rental reimbursement coverage and towing and labor coverage.

Information is available to consumers from a number of unbiased sources.These sources include public libraries, state insurance departments, online resources, consumer groups and consumer publications. Every state insurance department has personnel available to answer questions regarding auto insurance coverage and many departments publish premium comparisons to make shopping around easier.

When shopping for auto insurance, premium quotations are a useful tool for comparison of different companies' products.When asking for price quotations, it is crucial that you provide the same information to each agent or company.The agent will usually request the following information: description of your vehicle, its use, your driver's license number, the number of drivers in your household, the coverages and limits you want.

You should be aware that an auto insurance policy is a legal contract.It is written so your rights and responsibilities, as well as those of the insurance company, are clearly stated.When you purchase auto insurance, you will receive a policy.You should read that policy and make certain you understand its contents.If you have questions about your insurance policy, contact your insurance agent for clarification. If you still have questions, turn to your state insurance department.

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