Finance companies dictate that an auto insurance policy must be in the same name as the car loan holder. These companies require a full coverage policy in the name of the title holder as a means of lessening the lending risk.
If the driver in possession of the car loan finds himself without a full coverage auto insurance policy, he will also find himself in breach of contract with his lender. Repercussions can range from financial penalties to a visit from the repo man.
Careful compliance with the terms of your loan, as well your car insurance policy, will ensure a smooth process when buying and driving a new car. Read on to learn more and then enter your zip for a free car insurance comparison!
List All Drivers on the Auto Insurance Policy
The driving record of the primary driver on the auto insurance policy has the biggest impact on policy premiums. However, the record of each driver listed on the policy will be taken into consideration as well. Younger drivers and older drivers are likely to increase premiums.
While having a teenager or a 75+-year-old driver on one’s policy is guaranteed to cost more, deciding not to list a licensed driver residing in your household is not a smart or responsible option.
If a family member—or non-family member living in the same household—who is not listed on the car’s policy gets in an auto accident, the insurance company may be able to deny coverage to the unlisted party.
The policyholder is then liable for any property damage or injuries.
Sometimes, though, the insurance company will extend coverage to the non-listed driver, but will tack on an additional charge that will make the policyholder accountable for the amount he should have been paying all along for listing the teenager or elderly driver on the policy.
The Issue of Permissive Drivers
Car insurance generally follows the car, not the driver. It is not practical or possible to list every person with the potential to get behind the wheel of any given car. Therefore, car insurance companies grant coverage to what they call “permissive drivers” as part of each policy.
A permissive driver has permission from the car’s owner/car insurance policy holder to operate the vehicle.
But if the “permissive driver” is actually a family member or household member who should have been listed on the policy, coverage could be denied or handled in the manner illustrated in the previous section.
Find a Personalized Auto Insurance Policy for the Family
Here are some things you can do to help find the insurance company and coverage that fits your needs best:
– Use the internet
The process of shopping around for an auto insurance policy has been simplified with the advent of the Internet. Users can compare quotes with a convenient on-line tool that presents several car insurance quotes, with each company’s offering clearly lined up against the others.
Drivers can see how different auto insurance companies weigh a variety of factors, including location, demographics, and auto specifications.
Each company utilizes its own formula, a fact that supports the use of a quote comparison tool to find the right company for one’s personal circumstances.
In a simplified example, one company may charge higher premiums to the owners of all two-door vehicles while another company does not. All other factors being equal, it may be wise for a driver to choose the policy that does not immediately assess a financial penalty just for being in possession of that kind of car.
– Take note of factors in addition to cost
Insurance coverage is made up of many components, and while cost is one of the most important factors, it does not mean the others should be overlooked. Additional things to look for include:
- Other benefits
- The reputation of the auto insurance provider
- All the fine print that goes along with the policy
– Weigh the cost/benefit of changing your deductible
Another factor that is often discussed when it comes to the auto insurance policy is the deductible.
A deductible is what the insured must pay toward a claim before the insurance company steps in. The yearly premium will be less if the deductible is more.
– Find and Apply for Car Insurance Discounts
Finally, it is a good course of action to look into all possible discounts for your situation. Features that can lead to discounts include:
- Safety and anti-theft mechanisms
- The use of Electronic Payment Transfer (EFT) to pay the bill
- A multiple-car policy
The quote comparison tool is an invaluable service in this area as well. Keying in personal information (in a secure application) will result in detailed quotes from many providers.
By including all the elements that can make you eligible for discounts, you will be able to pinpoint the policy that offers the most savings.
Finding the best car insurance quote has never been easier. To find the rate that is most appropriate for you and your family, compare quotes now!