Does The Car You Buy Affect Your Auto Insurance Premiums?

February 3rd, 2016 by Simply Justice

Most new car buyers look at several factors when purchasing a vehicle, from aesthetic concerns such as body design and paint color, to practical aspects such as fuel mileage and safety record. One factor they are often unaware of is the relationship between the car they choose and its impact on their auto insurance premiums. They may also fail to understand the difference even the slightest variations in model, body type, and options may have on the auto insurance premiums they will pay to cover the vehicle.

Auto Insurance Premiums and Comprehensive Coverage

Most states require that drivers carry at least minimum liability auto insurance. However, most car loan lenders require that borrowers purchase comprehensive and collision coverage. Lenders often require borrowers to carry “full coverage” during the entire term of the car loan. The higher level of coverage will, of course, result in higher auto insurance premiums. The advantage of the comprehensive coverage is that the vehicle will be covered for both collision-related and non-collision related damage, such as weather damage, theft, or vandalism.

Auto Insurance Premiums and Depreciation

A major factor used in calculating auto insurance premiums comes from the current value of the vehicle. If the vehicle becomes a total loss in an accident, the insurance carrier should honor the claim for the vehicle’s current value. However, a collision insurance claim will not compensate the owner for the remainder of the loan balance. Drivers can purchase “gap insurance” to cover the difference and prevent them from going “underwater” on the car loan.

Auto Insurance Premiums and Passenger Injuries

Another aspect carriers use to determine auto insurance premiums is the record for passenger injuries in each type of vehicle. Drivers can purchase personal injury protection (PIP) and medical payments coverage to compensate themselves and their passengers in case of an injury accident. Policy holders can also access data on PIP auto insurance premiums for various types of vehicles. The data will allow drivers to see which vehicles in each class have the best safety records and the lowest average PIP premiums.

Auto Insurance Premiums and Legal Action

When drivers pay their auto insurance premiums, they expect the protection for which they paid. With all the additional protection available, as well as the additional auto insurance premiums the driver must pay, some insurers may not honor a legitimate claim. Some insurers may underpay a claim, while others may find ways to deny it entirely. When this occurs, vehicle owners can consult an experienced attorney to determine if they have sufficient grounds to pursue legal action against the insurer.

Source: Forbes

Get Answers For Your Auto Insurance Lawsuit Questions

To find out how we can answer your questions about auto insurance lawsuits, contact one of our attorneys today. Our intake team will take down the details of your case and quickly connect you to an attorney who understands how to get the most from your auto insurance lawsuit. You can also fill out the “Confidential Evaluation” form at the top of this page.

NOTE: This blog post is a news story and is not an endorsement of Arguello, Hope and Associates by any party mentioned herein.

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