4 Reasons Why Auto Insurers Can Penalize You

Auto Insurers

If you have been keen to compare the insurance premiums you pay with what your counterparts pay, you might have noticed some major differences. Two guys will typically walk into an insurance agent’s office, looking for the same type of insurance policy – and yet one of them ends up being charged what turns out to be as much as double the amount that the first guy is charged…it all looks so unfair.

To understand why car insurance premiums vary so greatly from provider to provider, one needs to take into consideration the fact that car insurance is meant to provide a financial hedge against the risk of road accidents (and perhaps car theft), to the person who takes it up. Insurance providers bet on the possibility of the person taking up their policy not suffering the risk they are taking insurance against, in which case the insurance provider would get to pocket all the money they took for insurance, since insurance money is never refunded, even if the person taking up the insurance policy never does suffer the risk they have taken cover against.

  1. Problems with expired insurance

You cannot place any excuse in driving your car without insurance. You are doing an offence while you are using a vehicle without a valid insurance policy for your car.Your insurance company has no obligation to notify about policy expiration. You can also have to pay apenalty for letting an unlicensed driver drive your car.

2. Comprehensive coverage

As mentioned earlier, insurance policies are sold in packages. It means the car, driver, and owner should always be covered by any policy required by the law. The driver and the owner can be two different people, such as when you are borrowing your friend’s car. Despite the fact that the car has comprehensive coverage, you are still not allowed to drive it unless you are insured.

Comprehensive coverage is for the car, not for the person who is driving it; there are some other different policies for driver such as medical payment and liability. Comprehensive covers any damage to the vehicle as long as it is not caused by accidents. Cheap auto insurance quotes do not usually include this coverage because it is actually optional.

3. No insurance violation

When you are pulled over due to any reason, and you cannot show proof of insurance, the police officer may issue a ticket for no insurance violation. It only happens if you are actually insured, but you cannot show your insurance card. The ticket can be possibly dismissed if you can produce the insurance card to the police department within the time period informed in the ticket.

4. SR-22 requirements

There are many online websites such as https://www.cheapautoinsurance.com/ providing free-of-charge car insurance calculator to help you find the most affordable insurance policies for your circumstances. It means there are very few reasons for not being insured. In case you drive without insurance and cause an accident, you will have to meet SR-22 requirements which basically oblige you to have at least minimum insurance liability in your state. You don’t have to wait until this happens to get insured. An SR-22 document should be kept for usually 3 years even when you move to another state.

Some of the factors that have been linked to higher incidents of car accidents, for instance, include poor road usage records (where someone has consistently been ticketed, charged and convicted for various road usage-related charges), poor choice of a car model (where certain car models have been shown to have considerably poorer safety records) and lack of safety features in cars, even the safer models, where the lack of such safety of such features – like anti-lock brakes and airbags – has been associated with higher road accident incidence, and grimmer results in the event of the accidents.

About the author: Nitin Maheta is the Founder of techiemates.com and a tech geek. Besides blogging he love reading books, Learning new things, and Hanging out with friends.

Image credit: Auto Insurers via Jaruek Chairak/Shutterstock