Auto insurance is something that most of us take for granted until we need it, and then we wonder why it costs so much. If you’re trying to figure out how auto insurance works, what to buy, and how much you should spend on it, this guide will help you get up to speed in no time.
We’ll answer some of the most frequently asked questions about auto insurance, including how much coverage you need, how to shop for quotes online, and even whether or not you can cancel your policy if you don’t own a car anymore!
.png)
What is auto insurance?
Auto insurance is a type of insurance that protects you from financial loss in the event of an accident. It is an agreement between you and an insurance company, where you pay a premium and the company agrees to pay your losses as defined in your policy.
Most states require you to have auto insurance before you can register or drive a car. Even if it is not required by law in your state, it is still a good idea to have auto insurance. If you are involved in an accident, auto insurance can help pay for repairs to your car and any medical expenses incurred by you or your passengers.
There are different types of auto insurance coverage, and the amount of coverage you need depends on a variety of factors, such as the value of your car, your driving habits, and the amount of risk you are willing to take.
What does auto insurance cover?
Auto insurance covers a variety of things, but the most important thing it covers is you and your car. If you are in an accident, your auto insurance will pay for the damages to your car and any injuries you may have sustained. It will also cover any damage you may have caused to another person's car or property.
Comprehensive Coverage (CC): Comprehensive coverage pays for damage done to your vehicle due to accidents. You should always have at least $10,000 worth of comprehensive coverage. Many people go even higher than that, buying up to $20,000 in CC coverage. This type of coverage is often referred to as collision coverage.
Uninsured Motorist Coverage (UM/UIM): This provides additional protection to you if you're involved in a crash caused by an uninsured driver. Any injuries sustained in these types of accidents aren't paid for by your car insurance policy, meaning you could end up paying more than just your regular insurance premium. Be sure to ask about UM/UIM before signing up for any policies.
Liability Protection: If you cause an accident, you could be liable for damages that result from that incident. Your responsibility is determined by how much liability insurance you carry.
Personal Injury Protection (PIP): PIP is similar to personal injury protection (PIP) in your home insurance policy. You might not think of your home as being “inherently dangerous,” however, a recent study revealed that 1 in 4 homes causes serious injury each year. As long as you follow a few rules, PIP can provide compensation for injuries you sustain.
Who needs auto insurance?
Auto insurance is a very necessary expense for all drivers. It not only protects you and your vehicle in the event of an accident, but it also protects other motorists and pedestrians on the road.
If you are involved in an accident and do not have auto insurance, you could be held liable for damages. This means that you could be sued for any damages that are caused by the accident. In addition, you could also be fined or have your driver's license suspended.
In fact, according to AAA's Insurance Center, having no tickets shouldn't even bump your rates. "Insurance companies base their premiums on factors such as driving history, location, age, gender, and marital status," says Brian Morelli, senior manager, pricing and underwriting.
How much auto insurance do you need?
There's no single answer to how much auto insurance you need. The amount of coverage you'll need depends on a variety of factors, including the value of your car, your driving history, the laws in your state, and more.
That said, most experts recommend carrying at least liability insurance, which covers damage you cause to other people and property in an accident. Beyond that, you'll need to decide how much coverage you want for yourself and your car.
Some things to consider when deciding how much auto insurance to buy include:
The value of your car. If your car is worth a lot of money, you'll want to make sure it's fully covered in the event of an accident.
Your driving history. If you have a history of accidents or traffic violations, you may need to buy more coverage to protect yourself.
The laws in your state. Each state has its laws about how much auto insurance you must have. Be sure to check the requirements
Let’s start by breaking down the major categories covered in your basic plan:
• Collision coverage – covers damage to your vehicle caused by collisions with other vehicles or objects
• Comprehensive coverage – includes liability protection and theft coverage
• Liability coverage – pays for injuries or deaths inflicted on others by your negligence or those of a family member under your control
• Medical payments coverage – pays medical expenses incurred due to injury or illness
• Property damage coverage – covers damages to property owned by you or by others under your control
How to get auto insurance
There's no one-size-fits-all answer to this question, as the best way to get auto insurance will vary depending on your circumstances. However, there are a few things you can do to help ensure you're getting the best possible rate on your car insurance:
- Shop around and compare rates.
- Make sure you're obtaining all the discounts you're entitled to.
- Consider raising your deductible.
- Keep your driving record clean.
- Keep your car in good condition.
- Review your coverage periodically to make sure it still meets your needs.
By following these tips, you can help ensure you're getting the best possible rate on your auto insurance.
Benefits of Auto Insurance
There are many benefits of auto insurance, but the most important is that it can protect you financially if you are ever in an accident. If you are at fault in an accident, auto insurance can help pay for the damages to the other driver’s car, as well as any medical bills they incur. If you are not at fault, auto insurance can help pay for your repairs. In either case, auto insurance can save you a lot of money.
.png)
