Why Must We Have Auto Insurance?

Many car owners, students, and ordinary people have been asking, why must we have auto insurance? The answer is simple and clear; the law stipulates that for you to drive any type of car, trucks, and motorcycle, you need one to cover yourself against accident, theft and other liabilities incurred while on road. That’s why auto insurance is needed.

This article will look into the definition of auto insurance, its importance, types and where to get auto insurance.

Definition

Simply put, car insurance is a type of insurance which provides cover or protects you (insured) against any form of damage, loss, theft, accident, and injuries that involves car. It should also be stated here that car insurance, auto insurance, vehicle insurance is all the same. The different use of the phrase depends mainly on location and how frequent is been pronounced in your community.

The main principle behind vehicle insurance is to protect the policyholder against a financial loss that might occur when driving. Such loss may include but not limited to theft and accident. This principle is handled in a form of contract whereby you as a policyholder agree to pay a fee called premium to auto insurance company (insurer) who in turns agree to handle losses depending on the types of auto insurance you took.

Car Insurance Agent

Definition:

Car insurance agent is a state licensed professional who is authorized by car insurance company or who represents an insurance company in selling of car insurance policy.  Before one can become a car insurance agent, he/ she is required to undergo many hours of training before representing or allowed to sell and service car insurance policy.

Types:

There are two basic type of Auto insurance Agent. They are:

  • Exclusive Auto Agent and
  • Independent Auto insurance Agent.
Exclusive Car insurance agent:

This type of auto insurance agent can also be called “Captive agent.” This is the type of agent that mainly represents a single insurance company or a particular or specified group of auto insurance companies. What distinguished this type of agent from others is that since they represent a specific company, they mainly offer one quote or price to seekers of vehicle insurance policy.

One way to identify this type of agent is through the signs or billboard displayed in the entranced of their office. They normally bear the name of the main car insurance companies that advertise on radio, national television, and internet. They are compensated with a commission of total price of auto insurance policy seeker took.

Independent Auto Insurance Agent:

These are mainly agents that shop for car insurance rate with more than one auto insurance company. This is done by comparing different quotes from multiple car insurance websites. Example of this type of agents is Williams Jim’s insurance agency or John’s Hammer insurance.

NOTE: Previous years of experience revealed to shop around in other to get the cheapest car insurance quotes, independent agent is far better to use than exclusive vehicle insurance agent.

How to Choose Car Insurance Agent

In choosing the right car insurance agency or agent, the first task on your side is to know the type of insurance coverage you want. Once this is settled, your next step is to list about five car insurance agencies or car insurance broker you have on mind, or you heard from friends or car insurance agents that people are always talking good about and choose one from there. When this is done, is now time for action. Your first action will be as follows;

Call the body responsible for auto insurance broker or agencies to verify if they are registered. It may be national insurance commission or your state car insurance regulator. Also, check if the car insurance agent is licensed. If he is not, avoid him and pick another car insurance agency and continue.

Check with the state or county insurance body if there have been complaints and problems the auto insurance broker has been involved in and ask if it will be alright to insure your car with them. This will help you know the regulators view about the agent.

When the above is done, it is now time to meet the agency in person

When you are with the car insurance agent, tell him the type of car insurance coverage that you want. Once that was done, a good car insurance broker or agent will start searching on his computer or internet to find the best available and affordable rate for you. This will also depend if he is a direct car insurance writer or independent broker. They will also demand other additional information from you to get things done.

As he is searching for car insurance policy for you, ask him how they are compensated. Good brokers are compensated by a company like for example, Hamer insurance company, they do not charge you the fee.

Once you feel he is ok with you, you can then ask other questions that are bothering you.

Such questions may include but not limited to:

  • Can I come back after one year from now to ask for new quotes?
  • In case of accident, can I get advice on how to go about claim? If yes, by what means of communication, phone calls, emails, fax, etc.
  • In case am not satisfy with your services, what are the conditions for me to switch car insurance firm.
  • Why do you think comprehensive car insurance cover is better for my second-hand car which does not have much value?
  • Since I have more than one vehicle, do you think pay as you drive car insurance policy will be good for my second vehicle since I don’t use it often? If yes, do you offer such a service?

In addition, avoid the following auto insurance agents

  • Avoid car insurance broker who pressurizes you to buy a car insurance policy or uses some tricks to lure you to buy a car insurance policy. Such tricks like buying one policy and insure your second car-free.
  • Also, avoid car insurance agent who does not search for a solution to your problem concerning buying your desired policy.
  • Avoid car insurance agency with no contact information.
  • Avoid insurance agency with no registered office location.
  • Try to avoid car insurance agencies not located in your state, i.e. those located far from where you are living.
  • Finally, choose vehicle insurance agencies with extensive network or with sub insurance brokers.

You can take a look at Hammer insurance agents, they have a vast experience on the insurance industry. They never charge you a fee while searching for you the right coverage that fit your needs. They are compensated by the company hammerinsurance.net.

Filed in: Insurance

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