Wednesday, April 21st, 2010 at
Teen auto insurance
Jeff Walker :I am looking for cheap car insurance for teen auto insurance. My friend told me that I should go for a higher deductible? Please let me know how this would help in getting a cheap teen auto insurance quote and what the deductible is?
Teen auto insurance : Higher deductible
Response : Teen auto insurance is normally very expensive and so intially till you can establish a good driving record, one sure way to reduce the teen auto insurance quote is going for higher dedcutible. A deductible does not mean that the teen auto insurance premium is reduced by this amount of deductible that you opt for. It only means that if you opt for a deductible of $500 than the teen auto insurance premium is reduced by 5%. In case you go for a higher deductible of $1000/- than the discount on the premium is by 10%.
Let me explain to you what a deductible is. A deductible is the amount which you will bear and pay out of your pocket before the insurance company starts paying you in case of a claim. Thus if you meet with an accident and have to pay $5000/- for your car repairs than you would be paying $1000/- out of your pocket and the insurance company will pay the rest $4000/-
This is why your teen auto insurance remium is reduced or you get cheap teen auto insurance and the insurance company gives you a discount. The insurance company saves money on a claim and so it offers a discount. Secondly, you have to keep in mind that the incentive for a cheap teen auto insurance premium in terms of discount is given since you would not be placing smaller claims of les than $1000/- with the insurance company. Thus the insurance company will save money for smaller claims since its adminsitrative expense will be nil in case of small claims.
Also it has been observed that once you have to pay a deductible than the drivers are very careful since they are going to bear a cost of the claim. Thus this is a positive ploy employed by the insurance company to encourage good driving and discourage bad driving habits. This is very important for teen drivers. It would be one best way to save money and have cheap teen auto insurance and to improve your own driving.
Drive carefully and enjoy your savings.
Thanks.
Kamlesh
Teen auto insurance
Tuesday, November 10th, 2009 at
Teen auto insurance
Jeff Walker: Thanks for the information on No fault auto insurance coverage. If this is bringing in so much auto insurance claims than why do you need “No fault coverage” under auto insurance policy? Would teenagers be able to get cheap automobile insurance coverage if the no fualt coverage was not given by insurance companies?
Car insurance : No fault
Response: Jeff, I understand what you are trying to say, however the purpose of auto insurance is not just to pay low premium but also be able to get a claim payment in the event of an auto accident. At the same time it would be wrong to spend a lot of money on legal matters and also auto insurance fraud. Let me first give you the benefits of “No fault” coverage and also the drawbacks of the No fault auto insurance.
Benefits of a no-fault system
No-fault system offers many benefits, including the following:
Quicker payment of claims by eliminating costly and time-consuming litigation over liability.
No splitting of fees with lawyers.
Lower insurance rates because expensive non-economic damage awards and legal fees required to defend liability claims are eliminated–legal fees currently account for 12% of premium costs.
Reduction in the number of lawsuits.
No subsidizing uninsured motorists; your insurer covers the cost of your medical bills.
Lower rates mean that auto insurance is accessible to people of lesser means.
Drawbacks of a no-fault system
No-fault insurance argue that the benefits are purely theoretical and that past performance has proved that no-fault is ineffective. Drawbacks include the following:
No compensation for pain and suffering, paralysis, or other non-economic damages; arbitrary limits are imposed.
Under pure no-fault and choice systems, bad drivers are protected because they cannot be sued for the damages they cause. Thus, there’s no incentive to be a good driver.
Rates are actually higher under no-fault. Regardless of theory, insurance premiums in no-fault states are on average 25% higher than in traditional liability states.
There is no reduction in litigation costs under a no-fault system. The time and effort insurers once spent defending litigation claims is now spent defending lawsuits brought by their own insureds for failure to pay no-fault benefits. In modified no-fault states, tremendous time and energy is spent litigating over whether or not the tort threshold requirement has been met.
Even your economic damages are limited by the terms of the policy. In traditional tort states, you are fully compensated for your loss by suing the driver responsible for your injuries. No-fault states have limits on liability, even for your basic economic damages. These limits result in people being forced to pay for any unpaid medical bills without recourse against the driver who caused the injuries.
Its really diffcult to decide what really works and so you will appreciate what the insurance companies also have to go through. However, keen competition in the market makes it possible for even young drivers to get cheap auto insurance quote.
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