Hoover Car Insurance
Ironically, the namesake of Hoover, Alabama was an insurance man by the name of William H. Hoover. What better way to honor him than to learn how to buy automobile insurance?
The Alabama Department of Insurance provides its own guide for consumers who drive in Alabama, called The Tort System.
There are no-fault, personal injury protection, and tort systems of insurance, determined by individual state law. As an Alabama driver, you are in the tort system and do not need to know about the other types of insurance modes.
Enter your zip code now to receive car insurance rates from the top companies in Hoover!
Tort simply means that you buy insurance based upon who might cause an accident.
In effect, you are responsible for covering yourself against all aspects of damages and injuries. For instance, you may cause harm to other drivers and buy bodily liability insurance and property damage liability insurance to offset those risks.
The minimum insurance required by Alabama law is the following:
- 25,000 dollars per injured or killed.
- 50,000 per two or more people injured or killed.
- 25,000 for property damage.
Another huge area of insurance, especially in Alabama, is covering yourself for damages and injuries that uninsured or uninsured motorists may cause. As of 2011, 22 percent of drivers in Alabama are uninsured.
Underinsured drivers are those who only buy the minimum insurance as required by law.
You might guess that 25,000 minimum property damage coverage will not replace or repair many vehicles, and you would be right. Yet, you cannot control how much insurance other drivers who share Alabama roads buy.
Instead, you buy sufficient insurance to assume liability for the underinsured and uninsured drivers. Talk to your agent or insurance company to determine coverage limits. Coverage limits refer to how much your insurance will pay out, at its maximum levels.
Determining Deductibles
If you had to make an insurance claim tomorrow, would you have 2,000 dollars to pay to make your insurance claim? If you chose 2,000 deductibles, did you know that you would have to pay that amount every single time you file an insurance claim?
If you choose lower deductibles you will pay higher insurance premiums.
Realize that you may have to pay multiple deductibles depending upon the severity of an accident. If you are hit by a hit-and-run driver, your whole family sustains injuries, and your car is totaled, you have an expensive claim.
If you chose all high deductibles, you would be out a lot of money out of pocket before anything was fixed or replaced.
You would pay separate deductibles for uninsured motorist property damage and liability damages. In addition, you may require a claim for your collision coverage too. Just because you have collision coverage on your vehicle does not mean it all gets fixed without you paying additional money, either.
Your car may be out of commission for a couple months while it is fixed.
That means you would have to come up with a rental car, perhaps. That is another line of coverage that many drivers hastily skip. Think of the true cost of skipping any line of coverage when you buy your insurance policies.
What's the difference between comprehensive and collision?
Another area of insurance to look at is called comprehensive. It also covers your vehicles but differs from collision.
Collision only covers your vehicles in impact accident situations. Comprehensive covers nearly anything else, including pings from hail, flooding, wind damage, trees, deer, burglary, and even theft.
It's important to note that you may want to skip these lines of coverage at some point. If you lease or finance vehicles, then by nature of those contracts you are obligated to keep both comprehensive and collision.
If you keep a vehicle long enough, it will lose enough value that it may not make sense to keep collision or comprehensive coverage.
Though, even the decision to drop coverage on your car is one not to take lightly. Usually, the formula is if after you pay up on your premium and deductibles you would receive less in coverage than your car is worth, you drop coverage.
You may find that you have a broken windshield and some broken headlamps following a run-in with a tree branch during a bad rain storm.
Say you have a $500 deductible and your coverage is $250 per six-month policy. If you hire a mechanic and bought the bulbs and a new windshield on your own you might break even.
On the other hand, you would have an insurance claim, which would probably raise your rates on your policy. If you dropped coverage, you would have saved the 250 dollars and the 500 dollar deductible. In addition, you would not be penalized because you would not file an insurance claim.
You would simply pay for your repairs with a body shop of your choosing.
Though, again, if your car were decimated by the same storm, you would have to come up with lots of cash to buy a new car out of pocket. However, if you have insurance, your insurer is going to give you the value of your old car, not a brand new one, minus the deductible.
More Auto Insurance Buying Advice
The National Association of Insurance Commissioners publishes an electronic guide called A Consumer's Guide to Auto Insurance. It is a free download that provides a very thorough exploration of auto insurance.
NAIC goes on to write that the value of insurance is not only personal protection and meeting minimum laws but to protect assets as well. The insurance company assumes liability for any lawsuits and has attorneys handle everything for you.
It is better than having to sell houses, cash out retirements and savings, and sell family heirlooms to defend yourself in court.
What about gap insurance?
Another area of insurance you may want to buy is called Gap coverage.
If you have a brand-new car or one still on lease or loan, then consider it. For instance, if your car is new and racked by a rough storm your insurance company pays only for damage.
It will not pay to bring your car back to its original value. That means, following a storm, your car could be worth less than you owe on your loan. That's a problem if your insurer officially declares your automobile totaled.
How is your insurance premium decided?
If you are wondering, your insurance company does not just have every driver pay the same rates across the board. Everyone is different.
- Driving Record
- Credit Score
- Age
- Marital Status
- Type of Car You Drive
- Where You Live
- How Much You Drive
- Previous Insurance Claims
- Deductibles and Insurance Limits You Choose
Basically, if you have a spotless driving record without insurance claims, then you pay lower rates than someone with a bunch of moving violations, accidents, and claims.
In addition, if you pay bills on time, according to your credit score, then you pay lower rates. If you are younger than 25 or older than 65, you are in more accident-prone age brackets and pay higher premiums.
If you are married, insurers know that there's a greater likelihood your premiums will be paid in a timely manner. You are rewarded for being married because they are likely to receive their money.
If you live in a congested urban area, where there are a lot of cars, the instances of accidents is more likely. That translates to higher insurance costs too. If you drive to see your family in Atlanta often, you probably rack up a lot of mileage.
Putting miles on the car increases the likelihood of an accident, and automatically increases your premiums.
Drivers who file a claim for every tiny scratch, ding and dent are only increasing their policy costs. Actually, think about it before you call the insurance company to fix an unknown scratch because it will flag your file and cost you more in policy premiums.
People who increase deductibles are rewarded with lower policy premiums. Though, again, make sure that makes sense before increasing deductibles to the point where you cannot pay them.
Buying insurance is a fact of life. It is required by law.
Though, if you shop around and compare quotes you can decrease your financial burden. Make sure you only buy the coverage you need and drive safely to decrease the chance of accidents.
Use our FREE tool below to find the right coverage for your family today!