Insurance Alliance of
Central Pennsylvania
www.tiacp.com
Why would an insurance company want more premium for one car than another if both cars are in the same price range? 
Insurance companies group vehicles into categories based on their likelihood of being damaged in an accident, vandalized, or stolen. The size and type of vehicle are taken into consideration. The cost of repairs to a given vehicle is also considered. (This can vary greatly even on vehicles in the same price range.) Some vehicles perform better than others. Insurance companies are able to determine this based on safety tests and on actual crash data gathered by insurance companies. It is important for you to research the safety and performance record of vehicles you are considering buying. You should also ask your agent for premium quotations on vehicles you are considering purchasing to avoid “sticker shock” on the premium cost once the vehicle is added to your insurance policy. What steps can I take to reduce my car insurance premiums? Insurance companies often discount their rates for good drivers and those who take safety and security precautions. A driver with no accidents or violations will be offered lower insurance premiums than a driver with accidents and/or violations. Discounts are commonly offered for: anti-lock brakes, air bags, passive restraint systems, and anti-theft devices. Discounts are often available for having more than one car insured with the same insurance company, or having other insurance policies, in addition to your personal automobile insurance, written with the same insurance company. Completion of a defensive driving course will usually qualify you for a discount as well. You can also lower your insurance rates by requesting higher deductibles for your Collision and Other Than Collision (Comprehensive) coverages. Or, if you drive an older car, the value at which the vehicle will become a total loss may be so low that it no longer makes sense to carry Collision and/or Comprehensive coverage on that vehicle. What happens when I loan my car to someone? Is that person covered by my policy? Am I still covered? Liability coverage and coverage for damage to your vehicle always follow your vehicle. So, if someone borrows your car and has an accident, your policy will respond to claims that your vehicle damaged someone else’s property or caused their injuries. As long as your policy includes coverage for Collision on the vehicle that was borrowed, damage to that vehicle would also be covered. In Pennsylvania, any injuries to the person who borrowed your car would be covered under their own personal automobile policy, as provided under the Pennsylvania Financial Responsibility Act (No-Fault). What are the different types of coverage available under a personal automobile policy? Personal automobile insurance is divided into several types of coverage: The “Liability” portion of your policy covers damage you cause to other people’s property as well as injuries they sustain as a result of your negligence. “Collision” covers damage to your vehicle caused by an accident. “Other Than Collision” (sometimes referred to as Comprehensive) coverage responds to damage to your vehicle caused by fire, theft, vandalism, break-in, and/or other non-collision losses such as a broken windshield or damage by flood waters, earthquake, hail, or hurricane. Note that if the vehicle overturns as a result of high wind, rushing water, and so forth, it is considered a Collision loss rather than an Other Than Collision loss. “First Party Benefits” coverage (in Pennsylvania) offers you choices for Medical, Wage Loss, Accidental Death, and Funeral Expenses. $5,000 in medical coverage is required. Higher limits are available for Medical coverage up to $100,000. Various coverage amounts may be elected for Wage Loss, Accidental Death and/or Funeral Expense. “Extraordinary Medical Expense” coverage is available for catastrophic medical expenses in excess of $100,000 up to $1 million. “Uninsured Motorist” coverage and “Underinsured Motorist” coverage protect you in the event someone with no insurance, or an inadequate amount of insurance, is responsible for your injuries. |
