New Car Insurance
New car insurance is always comprehensive coverage. There are seldom ever any exceptions to this rule. The vast majority of new vehicles are leased or financed to some degree and lenders typically require that their investment be protected. Most new vehicle owners will also want to protect themselves so that, in the event that an accident does occur, they are not left without a vehicle but with years of monthly finance payments still due. They will want to be able to have it repaired or replaced with the least possible financial inconvenience.
The person purchasing a vehicle for the first time would be advised to speak with an automobile insurance agent before completing the purchase to find out about premiums and different types of coverage, as well as guidance on how to file a claim. Otherwise, a simple conversation can be had informing the current agent of the change of vehicle and the different coverage desired. The agent, already familiar with the customer's driving history and other pertinent factors, will be able to quickly prepare the policy for the new car.
The new owner will be required to produce evidence of new car insurance on the vehicle before it will be authorized to leave the lot.
Coverage Types
Motor vehicle insurance is a legal requirement in most states partly because it ensures that financial support for persons injured in an accident caused by a motorist. Typically, motor vehicle insurance covers the vehicle and the insured party, which is the owner, as well as "third parties" which are other motor vehicles and other people. It provides financial compensation to people injured in accidents, or whose vehicles or other property were damaged in a traffic accident. It compensates the owner for fire, theft, and other hazards. New car insurance is usually comprehensive coverage as a standard requirement of financing companies, but whether it is financed, leased, or paid in full, it is always best that new car insurance to comprise comprehensive, collision, and bodily injury liability coverage.
Comprehensive coverage is one of the broadest types of protection available. It is generally considered the best coverge because it covers losses and damages resulting from a very wide range of accidents. It is sometimes referred to as "other than collision" and is often purchased along with specific coverage against collisions. The types of events covered in a comprehensive policy include theft and vandalism, fire, some single-vehicle accidents such as those involving animals, and damage from most natural disasters, which include floods and hail storms. A person with a new motor vehicle, especially if it is a very expensive one, would generally opt for comprehensive new car insurance coverage as it would pay for any repair or replacement in the period when the cost of replacing the vehicle would be at its highest.
A collision is said to occur when two vehicles collide, or one vehicle hits another object such as a tree or wall. Collision coverage safeguards the authorized motorist or vehicle owner against financial losses that could result from an accident of this type, regardless of which driver is at fault. It is also referred to as Collision Damage Waiver and the carrier will pay the costs to repair or replace the vehicle, if the new car insurance includes collision coverage.
Third party or bodily injury liability coverage provides compensation for injuries to the persons of these third parties, as well as damage to their property. The law in most states mandates some form of motor vehicle insurance, but whereas comprehensive coverage is sometimes optional, liability coverage for third party personal injury and property damage is required across the board.
All classes of new car insurance carry deductibles. These are the portions of each claim that the insured party agrees to payout of pocket, while the carrier commits to paying the remainder. The amount of the deductible affects the amount of the premium that must be paid. If the car owner agrees to pay a high deductible, the insurance carrier will typically charge a lower premium.
Cost of Automobile Insurance
The costs of new car insurance will depend to a large extent upon the value of the car. A late model car will carry the highest premium for its class, because of its high price, but the final premium will also reflect the carrier's estimation of the value of the owner's driving record, past history with the carrier, that is, whether or not the owner had previously had a policy with the agency, and the claims history.
If the driver has recently had speeding tickets, or several accidents in a short period of time, usually in the region of two to three years, the carrier will assess what is essentially a penalty and the new car insurance could be quite high.
