State Auto

Exceptions to the Cash and Carry Rule of State Auto Insurance Policies

save insuranceThe principle of “cash and carry rule”, which states that the contract of insurance is unenforceable until premiums have been paid, is not absolute in some state auto insurance legalities. Here are some exceptions:

The first one is a grace period. Whenever the car insurer has expressly granted extension of premium payments, the policy will not be suspended. Hence, the insurer is liable to pay the insured (i.e. car owner) if the car has been damaged during the extension granted by the insurer.

Next is acknowledgement of receipt. There is no doubt that the actual payment of premiums is immaterial once the car insurer has acknowledged a receipt of payment of premiums. Therefore, whether premiums are truly paid or not, as long as the car insurer recognizes the receipt as genuine and accepts the same, the policy cannot be suspended.

The last exception is installment. The system of installment is also well-recognized in the field of car insurance. There are cases where car insurers charge relatively higher premiums compared to an ordinary car insurance contract. And because of that, the company would much likely allow payment by way of installment. Therefore, even though the whole premiums have not been paid, but the same is continuously being paid by way of installment, the car insurer would still be liable to damages or loss.


Which State Auto Insurance Policy You Should Buy

Everybody thinks that having a great car can boost an ego and live up to one’s expectation. But apart from having a nice car, it should be partnered with a compatible state auto insurance policy. You need to abide by the rules of the state regarding financial responsibility and minimum limits of liabilities.

Every state requires minimum limits for its citizens to abide. These usually cover bodily injuries and property damage liabilities. Bodily injury liability pertains to other people’s bodily injuries or demise caused by you. This also protects you should the third party file a lawsuit against you. This covers medical bills or any loss of income from the third party.

Medical payments may be made should these be included in your policy. Regardless of whoever is at fault, insurers pay you back the medical expenses you’ve incurred in the accident.

Collision coverage answers for your damages caused by collision with another vehicle or property. State auto insurance companies offer to pay expenses for damages regardless of whoever is at fault minus the deductible you choose. Comprehensive insurance covers for any losses that have resulted to incidents other than collision. If your car is stolen or damaged by fire, flood or other circumstances, insurance pays you to cover-up your vehicle minus the deductible you choose.

Most States Charge Differently on State Auto Insurance

State Auto InsuranceThe premiums you pay for an insurance coverage has something to do with your traffic records. All these reflect your characteristics as a driver, and can prove to weigh a lot in estimating your insurance. The state where you belong also contributes to the price of the state auto insurance. Do take note that Michigan has the highest rates offered on premiums while Vermont is the cheapest.

State laws and judicial system usually affect high insurance premiums. Michigan alone has an average rate of $2,541/year. Louisiana ranks second highest in terms of auto insurance where motorists pay an average of $2,453. Washington DC, Montana and Oklahoma have average rates of above $2,000. South Carolina, which ranks second to the lowest, has a rate of $1,095 and Vermont has the lowest rate of $995. The high rates on premiums have resulted to the large number of uninsured drivers in these states; hence insurers charge high for safekeeping.

Michigan charge high premiums as it is the only state that offers unlimited personal injury protection payments for individuals injured in an accident. Louisiana has bigger payouts from insurers due to the existing judicial system that provide huge verdicts on injuries. Oklahoma is prone to tornadoes where insurers pay more for damage claims. Vermont is more of a rustic territory that experiences less traffic congestion. Competing state auto insurance companies often flock to these areas to offer their policies.


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