I am currently covered by a full coverage insurance policy from Progressive Auto Insurance. Full coverage is a combination of comprehensive and collision coverage. Comprehensive coverage, also known as "other than collision" coverage, covers a variety of damages, including theft, natural disasters, fire, and civil disturbance, such as riots that may damage the car. However, as the name suggests, the coverage excludes damage from collision and medical expenses that may result from accidents. Therefore, collision coverage seemed necessary to complement the inefficiencies of the comprehensive cover. Collision coverage covers situations such as rear-ending another vehicle, running into a fixed but innate object, and damages to the car from hit and run. I chose full coverage for several reasons. To begin with, I live in one of the smallest cities in Maryland, which is relatively peaceful. This means that the probability of an accident resulting from a collision is minimal due to fewer road users.
Additionally, the city is also peaceful, which means that riots and occasional strikes are close to nonexistent. However, accidents can occur even on the clearest of roads, and the city can also be affected by nationwide strikes that can result in the destruction of property. Collision insurance, as invaluable as it may seem in Maryland is thus necessary. The state was listed among the places in the US where disaster is prone to strike in a recent New York Times article that stated that Maryland has had 21 storms since 2015 (Chinoy, 2018). The other reason why I chose comprehensive coverage is because it was a requirement. The lender mandated a comprehensive as well as collision coverage until the vehicle was paid off when it was financing the car. The last reason why full coverage was necessary was that I could and still cannot afford another car out savings alone, and thus such a cover was necessary in case any of the occurrences mentioned above were to occur. Thus, Progressive Auto Insurance's full cover makes me afford another car in case of damages without having to pay out of the pocket for the same. It also keeps me less worried about the occurrence of collisions when driving.
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Maryland, just like any other state, requires a certain amount of insurance coverage from every driver before they can get on the road, and having proof of insurance is mandatory. For the liability coverage, the state has the 25/50/25 rule, which stands for $25000, $50000, and $25000 for bodily accident per person, bodily injury per accident, and property damage per accident, respectively (Martin et al., 2018). Maryland also recommends one of the extra covers, such as full, comprehensive, collision, and roadside assistance. However, the emphasis is usually on liability insurance. Failure to adhere to such regulations can result in consequences such as a $20 to $1000 fine, license suspension for up to 90 days, as well as jail term for up to a year (Martin et al., 2018). On the other hand, meeting the minimum requirements does not necessarily mean that one is properly insured. Despite the higher insurance rates in Maryland compared to other states, other forms of insurance policies also need to be included. The full coverage insurance policy on its own is inefficient, but I have used it alongside the liability coverage. In doing so, I have ensured that all the rules and minimum expectations are adhered to while reducing the worry of damages on the car.
As previously mentioned, one of the minimal requirements for insurance is $25000 for liability insurance, which is mandatory in Maryland. However, auto insurance deductibles are not responsible for liability coverage. Such a policy is different from the full coverage policy. My auto deductible is $1000 level, which means that the average six-month premium is $ 687. My premium level is thus the correct one as it caters for both comprehensive and collision deductibles. One of the things that determine the rate of a deductible is the likelihood of making a claim. When purchasing the car, the biggest quagmire I had was deciding between the $500 and $1000 deductible, but knowing that it part of the cash was a loan, the car needed to be in perfect condition; hence there was no likelihood of making a claim. Due to constant care, the vehicle is still in perfect condition, and this also reduces the chances of ever making a claim. The deductible, therefore, helps remove any fear of future additional expenses. In the same way, the deductible helps me avoid making a claim. The amount of annual deductibles increases after every accident. Therefore, having a high level makes one extra cautious on the road, knowing that an accident could double and, at times, triple the premium in the next few years.
Several factors affect the premium amount of the auto insurance policy, and they include the car, driving habits, demographics around the area of residence as well as the limits chosen. Although the model and year of manufacture make the insurance policy more expensive, having in-built security features such as anti-theft and anti-lock brakes give me discounts on the insurance premium. When it comes to driving habits, the driving record, as well as how much you drive, are the key factors that are considered. The demographic factors that are considered include the area of residence and parking, age, and gender. As previously mentioned, I live in one of the smallest and most peaceful towns in Maryland, and I only use my car to run errands, go to school, and occasional road trips to Washington DC. Therefore, the premium coverage for the car is relatively low, and I am occasionally treated for discounts, which caused no accidents so far due to careful driving.
While this is the case, the insurance premiums are relatively expensive, especially for a student, and some steps need to be taken to reduce the amount. The first one is seeking avenues from Progressive Auto Insurance. Various auto insurance companies across the United States offer numerous discounts, particularly for excellent drivers who rarely cause accidents. Consequently, I could use my accident-free record to request for discounts from the company whenever possible. Similarly, I could be on the lookout for additional courses that the company might hold, such as defensive driving classes to top up and be equipped with more skills. Such opportunities could avail the chance to ask for more discounts from Progressive Auto Insurance. Other opportunities that could also be avenues for the discount include having a good credit score, higher deductibles, and being a long-time customer. The second one is low-mileage as it will reduce the premiums and reduce the maintenance costs. Some of the strategies that can be used to lower the mileage include walking and cycling when running errands around the school, reducing the road trips, and commuting to school. More often than not, more time is wasted trying to find the right parking spot around campus, so it is often better to commute than drive. Since the campus is a few miles away from home, a taxi or bicycle could be a better mode of transport. Therefore, using either of the two would save time and energy and contribute to the low mileage goal that will eventually lead to lower premiums.
References
Chinoy, S. (2018, May 24). The Places in The U.S. Where Disaster Strikes Again and Again . The New York Times. from https://www.nytimes.com/interactive/2018/05/24/us/disasters-hurricanes-wildfires-storms.html
Martin, T. D., Wolff, B. S., & Cave, M. R. (2018). Insurance. Mercer L. Rev. , 70 , 111.
