Auto insurance at the pump
I’ve often wondered how insurance companies can make so much money despite paying out millions of claims. It could be that your premiums are higher than what you actually need. Are you ever concerned that you might be paying too much for Auto Insurance?
There are three main coverages for automobile insurance. The first is Liability coverage. The second is Collision coverage. The third is Comprehensive, also known as Fire and Theft.
Your coverage:
Let me go over the coverages and you will be able to decide if your insurance is too expensive. If you are found responsible for an accident, your Liability coverage will pay the other drivers. No matter if you are at fault, Collision coverage will cover the damage to your vehicle.
You are basically telling the Insurance Company, “Mr. Insurance Company, I will pay you every month for my car to be fixed in case it is damaged, even if you are at fault.” Both of you will reach an agreement on terms and sign a contractual.
Comprehensive coverage (Fire & Theft) covers your car in the event of a collision, such as if it is stolen, damaged, set on fire, or vandalized. Other coverages are available that cover medical expenses, income loss, and other things.
We will now only discuss these three coverages and then we’ll look at the capitalization of Insurance Companies to pay claims.
Why insurance?
You don’t want your car to be without insurance. And you also want to make sure the other drivers have insurance. You want peace of mind knowing there’s money available to pay your bills and for everyday living expenses if you are struck by another vehicle.
We have to admit, this is not always the case due to the way the insurance system works. Follow me now. To be legally on the road, you must have Liability Insurance. This coverage will cover you if another vehicle is hit.
The fact is that you cannot hit another vehicle unless your vehicle is moving. It can’t be pushed, it won’t move unless it is being driven. We both know that this vehicle can only be driven if there is fuel in it.
If you leave your car unattended in your garage and go on a vacation for two weeks or a long-awaited cruise for one month, then why should you have to pay liability insurance? Is that wrong? You could be penalized for not having insurance by removing your coverage and re-instating it after you return from vacation. Your license could be suspended.
Let’s suppose you buy a car new and finance it through the bank. The bank technically owns it until you pay the loan in full. They can also insist on Collision coverage if the car is damaged in an accident, or worse, if the accident was so severe that it was declared a total loss.
Pay at the Pump
Although I agree with this, remember that collisions can’t be caused by cars not moving. Cars can only move when there is fuel in their tanks. My theory is that if you need either Liability or Collision coverages, and your vehicle is not moving, shouldn’t your fuel payment be linked to fuel? The best way to do this is to include the fuel charge in the pump price. This will eliminate the possibility of drivers driving without insurance.
Your vehicle will stop if it runs out of fuel. You can’t do anything to it because it isn’t moving. You can instantly refuel your vehicle and it will be refueled.
Insurance companies charge you according the amount of time you use your vehicle. For example, if you drive it to work or if you just use it for pleasure. You pay more for driving farther than a set distance limit. For example, if you drive less then ten miles to work, you will pay less than if your drive more than 10. The insurance company says that the more you keep your car moving, the more likely it is to be in an accident.
If you drive 50 miles to get to work, it will take you more fuel to drive that distance than if you drove 7 miles. You could include your premium in your fuel cost. It seems fair to pay insurance.
Your Insurance is in your Car
Then, you park your car for 8 hours in the company’s parking lot. You then go upstairs to your office and complete a full-day’s work. Your car will not move for eight hours. You are still paying your insurance company, but you won’t be hit by anything or anyone. The parts of your car are in back order so you will be renting it for three days. The rental includes fuel and insurance. You are now paying twice. This list could go on, but if you’re as large as Insurance Companies, you can change the rules. It could be just one way your Insurance company can fulfill their promise to you. ?
All this is a strong argument to bundle fuel and insurance, but your agent is the most crucial missing piece. This is where you can get expert advice on how to best protect your assets.
