What Chicago Teens Need to Know about Auto Insurance and Auto Refinance Loans
Teenagers get very excited when they are finally able to drive a car by themselves, and they get doubly excited when they actually acquire their first car. Before they zoom off, however, it’s a good idea for parents to find a diplomatic and tactful way of giving them some lessons on how to handle their new responsibility, which is almost certainly the biggest they’ve had to date. Chicago area teens may be so excited to pick up their friends and head out for a night of fun that they forget about auto insurance and all the costs that come with it. Below we take a cursory look at the finer points of auto insurance.
Auto insurance basics: Carrying auto insurance is the law in Illinois. It’s better not to play Russian roulette with your car and learn this lesson the hard way by getting into an accident when you don’t have insurance.
Auto insurance covers six basic aspects of car accidents/maintenance:
• Bodily injury liability: It’s recommended to get more than the minimum amount required, because you can be sued for a large amount of money if involved in a serious accident.
• Personal injury protection (PIP)/Medical Payments: This pays for the medical treatment, lost wages and the cost of replacing the individual’s services. It may also cover funeral expenses. Just think of what it would cost to have to pay for this out of pocket if you are not insured.
• Property damage liability: This pays for damage you may cause to someone else’s property. Usually it’s their car, but it could be damage to lamp posts, telephone poles, fences, buildings, etc.
• Collision: This pays for damage to your own car. There will generally be a $250-$1,000 deductible (the higher the deductible, the lower your premium).
• Comprehensive: This reimburses you if you car is lost for reasons other than a collision, such as fire, falling objects, an explosion, a flood, a riot, or contact with animals such as birds or deer. Comprehensive usually has a $100-$300 deductible, but, again, you can lower your premium by taking a higher deductible.
• Uninsured and Underinsured: This will reimburse you if you’re hit by an uninsured or a hit-and-run driver. It is triggered when the at-fault driver can’t pay for your total loss. This will also protect you if you’re hit as a pedestrian.
Now that you have a grasp on the different types of auto insurance coverage and the associated costs, you should know if you ever find yourself in a position where you can’t pay off your existing car loan, you can opt for an auto refinance loan, which can get you a better loan deal than you currently have. Be sure to check if your current auto loan has fees for paying it off early. An auto refinance loan is similar to refinancing a mortgage, but it’s a much faster and simpler process.
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