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1. Why
do I need Auto Insurance?
Your car has two unique qualities.
First, it is probably one of the most expensive things you own.
Insurance protects your investment and guarantees you a way of coping
with the expense of accidents, vandalism or theft, as well as securing
your financial responsibility to the bank or other institution lending
the money to buy your vehicle.
Second, when you drive, you are
operating a powerful machine, weighing one ton or more and capable of
moving at over 100 miles per hour. You are responsible for the safety
of your passengers, your fellow drivers, other people's property,
pedestrians and yourself. Insurance helps you live up to that
responsibility by ensuring your ability to cover the costs of
potential damages or injuries.
You are also required to be
financially responsible by state laws, which are best satisfied
through your insurance coverage. In fact, in most states insurance is
a prerequisite to registering your car. So if you want to drive your
own vehicle, you must be insured.
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2. Does
Alabama require Insurance?
Yes, a recent Alabama law requires
that all motorized vehicles be insured
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3. What
can I do to keep my premiums low?
Insurers often discount their rates
in order to encourage good driving practices and the use of safety and
security precautions. Depending on the insurance company, you can
often lower your rates from 5 to 35 percent.
Sometimes the investment you make
in your vehicle is worth the discount, and sometimes simply worth some
peace of mind. For example, the purchase of anti-lock brakes merits a
discount from nearly every insurer, but the discount probably will not
pay for the brakes (which cost several hundred dollars) during the
normal life of your vehicle. Anti lock brakes are touted, nonetheless,
as a life-saving feature - a serious consideration when safety is a
top priority.
Insurers generally offer discounts
for:
• Safety Features - Anti
lock brakes, air bags and passive restraint systems (i.e., automatic
seat belts).
• Defensive Driving - Clean
violation record, driver's-ed courses for teenagers and defensive
driving or accident prevention courses for adults (insurance
discounts for the latter are required in some states).
• Security Systems - Alarms,
electronic locks and disabling devices.
• Changing Driving Habits - Commuting
by public transit, using a company vehicle for work related travel
and car-pooling.
• Formal Agreements Not to
Drink and Drive - The availability of a discount for signing
such an agreement varies among insurers and states.
• Buying Homeowners and Auto
Policies from the Same Company - If you own a home and an
automobile and you are insured by two different companies, check
into the cost of carrying both policies by one insurer. Your agent
can give you guidance as to which insurers offer discounts.
You can also lower your insurance
rates by requesting higher deductibles - the amount of money you pay
before you make a claim. Increasing your deductibles on collision and
comprehensive coverage from $100 to $250, or even $500, will bring
your rates down. Moreover, you may not need collision and
comprehensive coverage if you drive an older car. Ask your agent which
discounts are avail- able to you.
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4.
What happens when I loan my car to someone? Am I
still covered?
Yes. Liability and coverage for
physical damage (i.e., comprehensive and collision) always follow your
car. So, if a friend borrows your car and has an accident, you're
still protected against the cost of damages or injuries. Plus, if the
driver of your car is insured, his/her policy will also be available
to cover the cost of damages and injuries.
The same rules apply when you
borrow someone else's vehicle your own insurance follows you no matter
whose car you are driving. But the vehicle owner's policy is the key
coverage if you have an accident.
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