February 22nd, 2007
This is post one of two in a series having to do with SUV insurance rates.
Many times when people go to insure their brand new SUV for the very first time, they receive a big shock when viewing what they’ll be paying for car insurance on their SUV. Insuring an SUV can be considerably more expensive than insuring your typical family car, or even a sports car, and many people are stunned when they first find this out. There are a variety of reasons that car insurance rates for SUVs are much higher than other vehicles. Some of the reasons include higher prices, all wheel drive, safety problems, and fatality statistics.
Because SUVs tend to cost more than most sedans, if you have an accident, the insurance company will have to shell out more money to replace your vehicle, so it is going to cost you a bit more to insure your SUV. This of course applies to all vehicles that are pricey. Clearly you may want to take this into consideration before you purchase a SUV as not only the cost of the car but the price you pay for insurance affects your bottom line.
Another reason you will probably pay more to insure an SUV is because many of them come with 4-wheel driving systems. Quite often, those who have 4-wheel drive tend to horse their vehicles around a bit more, or even take them off road for a little fun. This type of driving raises a red flag because of the inherent risk of possible damage to your vehicle or getting in an accident. If your SUV has 4-wheel drive, as most of them do, then you should be prepared to pay more for your auto insurance.
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January 12th, 2007
So, what exactly is GAP insurance? In a nutshell, GAP insurance was created to provide auto insurance protection for “new” cars that are being financed. Application example…If a new car were stolen or totaled in an accident, Gap insurance will pay the difference between the cash value of the car and the current outstanding balance on your auto loan or lease. You see, when a new car is driven off the lot, it depreciates quite a bit. So, if your car were stolen a week later or totaled in an accident, your insurance company would pay what the cash value is on the car, not what you paid for it the previous week. Because of depreciation, this cash value would be quite a bit lower than what you paid and you would be stuck paying off the difference. That’s where Gap car insurance comes in.
Typically, Gap insurance covers accidents and thefts but you should check with your agent and make sure, because as we know, all policies are not created equally. Find out if it covers fire, tornado, vandalism or any other concerns you may have.
Gap insurance is not required when you buy a policy for your car. When you purchase your car, the dealership may ask you if you want to purchase Gap insurance from them. Normally you don’t want to do this because the premium price offered by dealerships is typically very high. Ask your agent if they offer it and how much it costs. Some insurance companies build in Gap insurance into your policy automatically so you may already have it.
Car owners generally assume that if their car is totaled or stolen, their policy will cover the value of the car, which many assume is what they owe on the vehicle were they to finance it. What you owe on the car and what the actual value of the car is almost never the same.
If you want Gap insurance, find out if there are any exclusions to the policy such as maximum limit or loss. The policy might have a maximum coverage dollar-wise or a ceiling on the loan-to-car-value ratio that they won’t go beyond. There also might be exclusions having to do with how your auto loan or lease is structured, loan amount or term of loan. Check all details with your car insurance agent before you buy. It’s also a good idea to estimate how long you’ll need the policy based on your car’s value moving on into the future. Your car’s greatest rate of depreciation is when you drive it off the lot and slows down considerably after that.
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