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Car Insurance Policy

A car insurance policy is a written agreement between an insurance company and an insured individual. It is essentially a contract, with both parties having rights and responsibilities within the context of that contract. If either party fails to adhere to the standards set forth in the contract, the terms of the policy may be voided and the coverage canceled. For this reason, it is always important to take a good look at any plan before you sign on for coverage and pay the initial premium to work with an auto carrier. Do not enter blindly into an agreement with so much at stake unless you know exactly what you are signing on for. Understand the terms of your contract, including both coverage and exclusions.

Auto Policies are Contractual Agreements

Every car insurance policy is a mutual contractual agreement between two parties, the insured and the insurance provider. As such, policies set forth the terms of the relationship you will enter into with a provider. If you are looking for auto coverage and are just trying to find the fastest way to the cheapest premium, it is wise to slow down a little and take the time needed to understand what it is you are getting into before you spend a dollar of your hard earned money. Finding a bargain is great, and saving money on a cheap car insurance policy is awesome if you can manage to pull it off. But a bargain ceases to be a bargain if it does not provide the level of coverage you need as a driver and the head of your household. If there are multiple drivers on your policy, this issue becomes especially important to consider.

Take this scenario as a pertinent representative example. Let's say you are the head of a household of three drivers. You and your spouse were the only drivers for quote a few years, and now your son has turned 16 and is ready to hit the road. You naturally want to save as much money on your car insurance premiums as you can, so you look high and low for good deals. A low price pops up and you pounce on it. You even pay the car premium in full because it is so inexpensive that you can actually afford to do this.

Then your teen gets into an accident, and only at this time do you pull out your paperwork and find that the car insurance policy you ended up purchasing only included bare bones liability coverage for your teen. He ends up getting sued for excess injury and property damages as well as pain and suffering, which you have to pay out of pocket. And to top it all off, your cut rate auto insurance carrier cancels your whole family just from this one accident. All of a sudden, this bargain basement car policy seems like one that was printed off in someone's basement.

Understand Your Policy before Signing

In some ways, this is an extreme example, but everything described here actually could happen. If you have a knee jerk reaction to a cut rate car insurance policy, you could very well end up with a car plan that just barely passes legal muster in your home state. If this is what you want, just enough of a car insurance policy to avoid a ticket if you get pulled over, that's fine - policies like monthly car insurance plans will work. But if you want insurance that delivers value for the premium, you sometimes have to look beyond the sticker price.

This can be a hard thing to do for a lot of people. We're conditioned to look at things based on cost first and all other factors second. Here's an easy way to do it: sit down and figure out the exact specifications of coverage you need in a car insurance policy, and get prices based on those specifications alone. Go backwards to the final price and you'll know what you get is really the great deal you're looking for.

Look at Coverage and Exclusions

One of the things you need to look for in any car policy is the coverage and limitations of coverage as outlined in its terms. Check your car insurance policy to see what is included. For example, you might have basic or broadened collision or comprehensive insurance. And there is a very significant difference between the two. Get to know that difference and make sure the car policy you end up with is worth more than the paper it's printed on.

Searching for deals on auto coverage can be tricky, because most states have low minimum standards for coverage. If you are not careful, you could end up with a minimal car insurance policy when a few extra dollars could have bought you more.

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