Reader’s Question:

What are the advantages and disadvantages of full coverage auto insurance?

Babie

New Orleans LA

Full coverage auto insurance provides coverage for you and your car in all events such as robbery, fire, accidents and the likes. It may be the most expensive type of auto insurance policy but, it also the most common. There are number of benefits that a person can get from this:

Advantages

1. Complete protection. Auto insurance companies will not restrict the boundaries of this policy on your-fault-his-fault rule. Regardless of you being responsible for an accident, your auto insurance company will still provide you the pay out for the damages accrued because it is part of your auto insurance coverage. If in case you have seriously injured someone during an automobile accident, your full coverage auto insurance will supply protection on your home, bank accounts and investments. With only a minimum coverage, you are at a brink of losing everything you have worked hard for your entire life. But having the right liability coverage on your auto insurance policy will ensure that your insurance will cover damages and medical expenses for the injured person or persons.

2. Car rental services. Most insurance companies provide rental cars or loaner cars if your car is expected to take more than 24 hours to repair considering that you have this type of policy. You don’t have to pay out of pocket for transportation to work and other tasks while you wait for your car to be repaired.

3. Peace of Mind. Knowing that you are being backed up by a formidable type of auto insurance policy, you can rest assure that in the events of unavoidable circumstances such as accidents, your insurance policy will cover you and secure you from financial ruins. Also, because this policy will protect your assets, you can be assured that your family’s future will also be protected.

Disadvantages

Premium Costs. With full coverage auto insurance policy, you will have to pay higher premiums compared to others. If you have a car that is financed or has numerous after market customization to it, it would be wiser to settle for liability only insurance policy. If the car is old, you have better chances of replacing it for much cheaper.

Weighing the pros and cons of this type of policy can truly help you in deciding if going for this kind will be on your best interest – or not.

Reader’s Question:

I’m from Louisiana and I want to obtain auto insurance. However, I want to find one that is inexpensive but can cover my needs. Any tips you can spare?

Victoria

Baker LA

You are not the only person in the world who wants to obtain inexpensive auto insurance in Louisiana. However, it is more important to look into the coverage of the insurance first before thinking of the price.

In doing so, you have to imagine what your insurance would do for you in case something bad happens along the way. Do you want it to cover for the damages incurred by your vehicle? Do you want your insurance to pay for your injuries and your passenger? Do you want it to protect your vehicle from damages caused by theft and nature?

If you want all of these, most probably the right insurance for you would definitely cost more. However, if you are quite tight on the budget, you can always settle for ones that can cover the minimum liability set by the Department of Motor Vehicles. In Louisiana, the minimum liability is 10/20/10. This translates to the following:

• $10,000 bodily injury per person
• $20,000 bodily injury per accident
• $10,000 property damage

However, that’s not all you can do to cut your insurance cost to hit rock bottom. Discounts are also most applicable for this commodity. Although, discounts in this case are not given periodically like they do in malls but they can be granted to you in special cases like paying bundling your insurance or for being a good driver.

Most insurance companies will be happy to enlighten you with what they can offer. To get the best insurance, understand their coverage terms. Certain auto insurance in Louisiana might already be bundled up with other coverage that is not even required by your state. So this can be a great bonus for you. However, you can always cut cost by asking yourself if you really need the additional item.

Reader’s Question:

Why do I find such varying rates from auto insurance companies in Louisiana?

Larry

New Orleans, LA

There are a hundred and four local auto insurance companies in Louisiana. Some of them sell directly to customers, while others go through auto insurance brokers and agents. Besides these differences, you noticed that there are sometimes huge disparities in the quotes that you have pooled together from the various auto insurance companies in Louisiana. Premiums are, in general, based on how much of a risk you present to the auto insurance company, how much it would cost them to do operate their business, and how much they expect to pay for all the claims filed in a year of operation. They figure out how much of a risk you are by looking at your age, your gender, the kind of job you have, the model of your car, your credit history and your driving history. Some auto insurance companies are better at setting rates for certain types of drivers. There are those that specialize in insuring women, others focus on mature drivers, while still others may be concentrating their market to high risk drivers such as those that get cited for DUI. The cost of doing business is also different for each auto insurance company. Smaller companies probably have a lower overhead compared to major auto insurance carriers, and this naturally affects their pricing. To estimate the amount of claims they have to pay in a year, auto insurance companies usually assess the risk factors in a given area. Densely populated urban areas typically have a higher incidence of road accidents as more people mean more cars on the road.

Reader’s Question:

I’m thinking of having auto insurance but my funds are not that big. What is the lowest auto insurance coverage offered in Louisiana?

James

New Orleans, LA

In Louisiana, the law requires automobile owners to carry their liability coverage. This will cover up personal injury as well as property damages for which you are legally responsible. The coverage provides a 10/20/10 percentage for liability limits. Every automobile owner is provided with $10,000 for payment of bodily injury exclusive to one person and it goes up to $20,000 if 2 or more people get involved in a particular accident. The coverage also provides property damage liability worth $10,000 as a payment when properties such as someone else’s automobile is damage during the accident.
The above mentioned percentage is true for the year 2008 and backwards. Currently, the state put up an increase in the mandatory liability of auto insurance coverage which is to be implemented during the first day of 2010. The new bill put up a 15/35/25 as the minimum coverage requirement. This will surely affect the current policies implemented in line with the increase in the minimum insurance requirement.

Automobile owner who choose to have the minimum requirement for their auto insurance should expect the rate to increase by 5-10% while those with higher liability limits are bound to experience a slight decrease with their auto insurance coverage.