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Car and Home Insurance

Combining car and home insurance is often called bundling. It means you use the same insurance carrier for your home and auto insurance in order to take advantage of additional discounts.

Bundling is one of the things you can do to help control the rise in cost of insurance policies. Many of the bigger insurance companies like State Farm and Allstate, and some of the smaller carriers, are happy to help you combine policies and reduce your insurance rates.

Insurance companies like to bundle policies for many reasons. For one thing you are less likely to change insurance companies on one type of policy, like for car insurance, if you are with the same company that holds your house insurance, and sometimes even your life insurance. Also providing a reduced rate for bundled policies can protect the insurance company because the risks of a claim are reduced and yet the insurance company will still generate a profit.

Finding a Bundled Insurance Policy

You shop for a bundled insurance policy just like you would for a separate home or auto insurance policy. You need to research individual policies for car, and others for home, and then see what their discount is for combining the two policies together. Before you ask for comparison quotes decide what types of insurance you want, what limits and levels you need, what deductibles you want quoted, and then ask for the same thing from several companies so you can make an apples-to-apples comparison.

Once you get the quotes you can check payment options. Some companies will give another discount for automatic payment. You can also check their service options and make note of any extra coverage options. It makes since to start with your auto insurance as this will be the most expensive component of bundled service.

Comparing Auto Insurance

Make sure the company’s you compare for car insurance also carry home insurance and offer discounts for combining them. Collect the information from existing automobile policies to make sure you have the year, make, and model of all the vehicles you own.

Understand your state minimum car insurance requirements, and if you have a lender on any vehicles make sure that you know what the lender requires you to carry on the car. Typically the bank will require collision and comprehensive to cover replacement or repair of the car. Depending on the value of the car they may also require you to carry theft, full glass, and fire. If they don’t require this type of insurance, you might consider adding the coverage. When considering insurance for your car you should remember that if it is totaled you will have to make up any difference between what the insurance company pays and what is left on the loan.

Comparing Homeowners Insurance

Once you’ve narrowed the car insurance providers that you are interested in to two or three companies, you can get quotes from these companies for homeowner’s insurance. Each insurance company may require you to do this in a different way. Some will allow you to request a quote online for homeowner’s insurance, others will require you to speak with an agent over the phone or via an in person appointment.

Again for an apples-to-apples comparison you need to get the quote on the same deductibles and the same options, levels, and limits. Then you can highlight any differences or added benefits to each policy offered. Typically homeowner policies are less complicated and more generic than car insurance. While standard auto insurance doesn’t generally cover theft of personal items that are stored in your vehicle, RV, or boat, some homeowner policies will. Because of these differences you should compare not only the cost of the homeowner policy, but the types of additional coverage options for the difference in cost.

When you consider the savings in bundling both car and home insurance, consider the savings not just monthly and annually, but over the life of a thirty year mortgage.

Summary

Bundling car and home insurance can save you money. Once you’ve done the work, you shouldn’t just take the savings for granted each year. It is a good idea to review the coverage and cost of your insurance every few years if you don’t compare them each year. About a month or two before it is time to pay the annual premium on your home insurance you should take out your policies, review the coverage and the costs and get a few online quotes to see if the insurance coverage is still cost competitive.

It is also a good idea to check to see if the coverage you have meets your needs. Have you purchased jewelry or artwork that needs higher limits added to your homeowner’s policy? Do you have a home office for a business that you didn’t have last year? Have you paid of a car loan or has the value of your car decreased so that you can increase deductibles or drop collision and comprehensive car coverage? It’s a good idea to review your car and home insurance occasionally to ensure it still makes sense for your life.

Average Car Insurance

Having average car insurance typically means that you have more that what is required by law, and less than premium coverage. If you are searching for car insurance one of the first things you need to do is determine what you have to have in order to drive in your state, and if you don’t own your car you need to figure out what the lender (the person you are making payments to for the car) requires you to have so you are not in default of your loan.

To check your states minimum car insurance requirements, see here.

Full coverage car insurance often combines accident or collision insurance, liability insurance, uninsured motorist, no-fault, and comprehensive coverage into one insurance policy. The limits for each of these and applicable deductibles will separate an average insurance policy from premium coverage.

Full Coverage or Not

If you have full coverage you are covered if the car is stolen, or if anything happens to the car up to the policy limits. Typically a person is required to have full coverage anytime there is a loan on the car. Bank and other lending institutions have specific requirements as to the level and type of full coverage required to have the loan. If you own the car, depending on how much it would take to fix or replace the automobile, you may not need full coverage.

Full coverage on the vehicle means the lender for the car is covered if it is totaled or wrecked. Having collision and comprehensive insures will allow the bank to get money back if something happens to the car. The car owner is covered as well. If your $20,000 car is totaled and can’t be repaired, you don’t have to pay for a car you can’t drive. Before granting a loan, the bank verifies worth of the vehicle, so insurance would pay off the amount of the loan and if you had equity in the car you would get the balance of the money to use towards a replacement vehicle.

Required Liability Insurance

Whether or not you choose to carry collision and comprehensive for the vehicle if you have the choice, you have to have liability insurance in order to license a car in most states. Each state sets the minimum amount required and it will be shown like this: 25/50/15. These numbers represent thousands of dollars in coverage.

If these are the minimums for your state it means that you are required to carry $25,000 of Bodily Injury Liability for one person outside of your vehicle that is injured in an accident due to your fault. The 50 stands for $50,000 maximum to cover all injuries that occur for each accident due to your fault, and $15,000 is the maximum paid for property damage in one accident.

No-Fault Requirements

Some states also require that you have no-fault insurance. This means that your insurance policy has to pay the medical expenses for everyone in your vehicle, no matter who is at fault for the accident. This type of law is intended to help eliminate insurance fraud. It is important to note that even if your state has a no-fault requirement, you will still have to carry liability, even though technically no-fault insurance means that everyone pays for themselves in spite of of who is liable.

It is also important to understand that if you carry the minimum amount of car insurance that your state allows, but have an accident in a state with higher minimums or additionally required insurance, by design your coverage will increase to match the minimum insurance protection needed in the state where the accident occurred.

Bumping Your Coverage from Basic to Average

Car insurance minimums may not be enough coverage. The cost to fix or replace cars, the rising costs of medical care, and the risk of being in a multi-car accident mean that minimum levels will put you at risk. If your insurance doesn’t cover the costs involved in an accident deemed to be your fault, you can be sued for the difference, even in a state that is technically a no-fault state because if you are hit by an out of state driver, they can still sue.

Many agents and insurance governing associations will suggest that drivers have at least 100/300 in order to provide liability levels at $100k per person with $300k total per accident. This coverage would typically be considered average coverage in today’s world.

Summary

Average car insurance means that you carry more the minimum required by the laws of your state or your lender, and less than what would be considered premium car insurance coverage. Drivers should understand what insurance they have to carry in order to legally drive on US roads, and then assess their individual needs.

Auto Insurance Basics

Auto insurance policies all have basic types of coverage, often with minimum levels set by the state you live in. Understanding these basics can help you make sure you have carry enough insurance and will help you compare pricing.

Liability Insurance

Almost all states in the US require liability insurance. This coverage will pay for damage done with your vehicle to other people or property. Liability insurance is not used to pay for your injuries, or for those injuries done to any one else on the policy.

A typical insurance policy or quote will list your basic minimum level of liability auto insurance coverage as something like 25/50/10. Every state is allowed to establish its own minimum requirement for liability so it is important to know what it is in your state. While many are 25/50/10, some are 25/40/10, or even 15/30/10.

In 25/50/10 the first number means that any person (besides you) that is injured in an accident that is your fault would receive a maximum $25,000 from the insurance company to cover injuries or items like loss of work. The second number reflects the maximum paid out by the insurance company per accident. So if there are three people in the accident, they wouldn’t each get the individual maximum to pay for their injuries, but would have to split the over all accident maximum of $50,000.

The last number, or $10,000, is the maximum amount paid by the insurance payment for property damage. These numbers are important because if the damage is over the stated coverage amount than you can be sued to pay the difference.

While you have to carry the minimum amount of liability coverage required by your state, you can and maybe should consider carrying more. Some experts suggest carrying liability coverage equal or close to your net worth. Regardless, it is important to check what the different cost would be to add a little more liability to basic coverage.

Collision Insurance

Collision insurance is what will pay to fix your car if it is damaged in an accident with another car or another object while you are driving the car. Typically you will have a deductible, from $100 to even $1000. This means that you pay the deductible amount first before the insurance company covers the rest. On many older cars that wouldn’t be worth fixing the owners may be able to choose not to carry collision insurance.

Comprehensive Insurance

A car accident isn’t the only way a car can be damaged. Hail, floods, fire, theft, etc can all cause damage to a vehicle and require it to be fixed or replaced. Again you will typically have a deductible that you have to pay before the insurance kicks in.

Both collision and comprehensive coverage are required basic coverage if you’re still making payments on the car. If you own the car then it may be a waste of money to keep this type of insurance on older cars. This is especially true if the cost to replace the vehicle is less than a few thousand dollars.

Personal Injury Protection or PIP Insurance

Often this type of basic insurance coverage is called “no-fault” insurance. Some states require PIP. This type of insurance is used to cover your medical costs, and in some cases lost wages, if you are injured in an accident. Some PIP policies will also cover injuries to other passengers in your car, and in some cases pedestrians. Check the policy to see exactly what your PIP basic insurance covers.

Uninsured Motorist Insurance

Even though everyone is required to carry minimum liability coverage, there are some who don’t. Uninsured motorist insurance is intended to cover both you and your passengers if you are hit by an uninsured driver. This part of your policy will also cover those accidents where some one hits you and leaves without exchanging information. This is called a hit-and- run accident.

Summary

Auto Insurance policy basics include liability, uninsured motorist, PIP, and sometimes collision and comprehensive coverage. There are many additional things that can be added, such as window glass replacement, towing, and other items.

You can save on your car insurance policy often by just understanding what you need, and getting the basics. In 2008, Consumer Reports suggested that the average American family could save about sixty-five dollars a month by simply getting competitive quotes on their car insurance. They could save further by taking of extras like towing, paying the insurance quarterly, semi-annually, or annually, and even buy thinking ahead and checking insurance quotes on vehicles before you buy. This is recommended as cars have different costs for repair and replacement and the difference in the cost of basic auto insurance can vary greatly between makes and models of cars.

To get free competitive online car insurance quotes from several companies, go here.