Whether you drive daily, occasionally, or manage multiple vehicles, understanding your coverage options can help you make informed insurance decisions.
Auto Insurance
UNDERSTANDING YOUR COVERAGE
Types of Auto Insurance
There are different types of coverage and benefits available through an automobile insurance policy. The principal coverages are outlined below, but every driver’s needs are different.
Most drivers benefit from a combination of mandatory and optional coverages tailored to their vehicle, driving habits, and financial goals.
Basic Coverage
Third Party Liability
Liability coverage pays for a legal claim against the policyholder in the event that he or she is in some way responsible for an accident that causes injury or damage to a third party. The minimum limit requirement is $200,000.
Accident Benefits
Accident Benefits cover occupants of a vehicle in the event of injury. Coverage includes medical/rehabilitation costs, funeral expenses, death benefits, income replacement.
Additional Coverage
Collision
Collision coverage pays for the repair of a policyholder’s vehicle if the vehicle is damaged in an accident caused by collision with another object or upset. There is usually a deductible amount indicated for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.
Comprehensive
Comprehensive provides coverage for damage resulting from other than a collision, such as hail, vandalism, theft or fire. There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.
Specified Perils
Specified Perils coverage is a more limited version comprehensive that covers damage arising from named perils of fire, lightning, theft, etc. There is usually a deductible amount for this coverage. The deductible is either paid by the policyholder toward the cost of repairs or deducted from the claims settlement.
Endorsements
An endorsement is an attachment to a standard automobile policy that increases or reduces coverage under the standard policy. The more common endorsements include:
This limits the coverage on a vehicle’s glass for a reduced premium.
Provides for the rental of a vehicle or the use of taxicabs and public transportation to a specified daily dollar amount and total amount in the event your vehicle is damaged due to a loss covered by the insurance policy.
Extends the physical damage coverage and deductible that you have on your personal vehicle to a rental vehicle.
This endorsement protects the renewal premium from increasing as a result of an at-fault accident involving the vehicle to which the endorsement applies.
This endorsement will waive any depreciation on repair or replacement of a new vehicle (subject to certain restrictions) should it suffer an insured loss. The term for which this coverage is offered varies with insurer (typically 24-30 months).
Protects you and family members in your vehicle if you are involved in a collision with an uninsured or underinsured driver. Even though you may have the right to collect money from an at-fault driver to reimburse you for your claim, if that driver doesn’t carry enough insurance or has no insurance at all, your claim may not be fully paid. SEF 44 pays the difference between your claim settlement amount for injuries arising from the accident and the third party liability limit of the at-fault driver’s policy up to your own third party liability limit.
Factors That Affect Your Premium
Auto insurance premiums are based on a variety of factors related to driving history, vehicle type, location, and coverage selections. Insurance providers use these details to assess the likelihood and potential cost of future claims.
Because every driver and vehicle is different, premiums can vary significantly from one policyholder to another.
Driver History
Past driving behavior and insurance history.
Lapse in Coverage
Gaps in insurance coverage may lead to increased premiums when restarting a policy.
License Suspension
Past license suspensions may affect eligibility and premium rates depending on severity and duration.
Driving Convictions
Traffic violations and serious driving offences can result in higher insurance costs.
At-fault Accidents
Previous at-fault accidents may increase your insurance premium for several years.
Driver Profile
Personal driving experience and demographic risk factors.
Age
Insurance premiums are often higher for younger and less experienced drivers.
Gender
Insurance statistics may influence premiums based on overall collision frequency trends.
Years Licensed
Drivers with more years of licensed experience generally qualify for lower premiums.
Marital Status
Marital status can affect insurance rates, particularly for drivers under 25.
Vehicle & Usage
How, where, and what you drive.
Type of Vehicle
The make, model, and year of your vehicle can influence repair costs and insurance rates.
Use of Vehicle
Premiums vary depending on whether your vehicle is used for commuting, business, or personal use.
Occasional Operators
Adding occasional drivers, especially younger drivers, may increase coverage costs.
Territory
Drivers in urban areas may pay higher premiums due to increased traffic and claim frequency.
Policy Choices & Savings
Coverage selections and discount opportunities.
Limits of Coverage
Higher liability limits provide greater protection but may increase premiums slightly.
Driver Training
Completing an approved driver training course may qualify newer drivers for reduced premiums.
Discounts
Many insurers offer discounts for bundling policies, multiple vehicles, or safe driving.
Ways To Lower Your Premium
Obtain a quote prior to purchasing a vehicle
Before buying a vehicle, find out how much the vehicle is going to cost to insure. Premiums vary based on the claims experience for the make, model and year of vehicle
Increase your deductible
The higher your physical damage (collision, comprehensive and specified perils) deductibles, the lower the premium.
Insure exposures with one insurance company
Companies offer multi-vehicle (insuring more than one vehicle) and many offer multi-policy (insuring both automobile and property) discounts.
Reduce physical coverage on older vehicles
On older vehicles, you may want to consider deleting collision coverage. The cost of insuring some older vehicles for collision could be high relative to the value of the vehicle itself.
Remove windshield coverage
Coverage for windshield glass can be expensive to purchase; consider limiting this coverage by purchasing a “Comprehensive Cover Limited Glass” endorsement-SEF 13D.
Install anti-theft devices
Many companies offer a discount for anti-theft devices, and in addition, this will also help to keep claims costs down.
Consider cost of monthly pay plan options
Monthly payment plans are convenient, but there is usually a fee added to the premium for this service.
Take driver training
Newly licensed drivers who complete a driver training course qualify for a reduction in premium
Drive carefully
Traffic convictions and at-fault accidents result in increased premiums
Find Coverage That Fits the Way You Drive
Every driver is different. We’ll help you compare coverage options, understand your policy choices, and build protection that works for your vehicle and lifestyle.