Consumer Guide to Car Insurance

The Importance of Car Insurance

For most Americans, driving a car is an indispensable part of personal freedom and empowerment. With that freedom and power comes a responsibility to yourself and others. Car insurance can provide a degree of financial protection against the high cost of accidents and injuries. There are a number of car insurance packages and providers to fit the variety of drivers on the road. This guide is intended to help you learn the basics so you can find the right car insurance policy for you.

Guide to buying Car Insurance

What Kind of Car Insurance Is Legally Required?

Purchasing some level of car insurance is not only a smart investment, it is a legal requirement in almost every state. The insurance that most states require is called Minimum Liability Insurance, which insures against liability for property damage and for bodily injury.

Property damage liability insurance covers damage to another person’s property. If you drive your car into some one’s fence (and you were liable), property damage liability insurance will help pay for the expenses related to the damaged fence. Bodily injuries liability insurance covers the injuries of other people in a car accident if the insured driver is deemed liable.

The states have different laws regarding Minimum Liability Insurance requirements, proof of liability, and the roles of the parties’ insurance companies. If you only want satisfy your legal duty, it can be helpful to consult with an insurance agent on the specific laws of your state.

What Additional Coverage Options Are Available?

Car accidents often cause property damage and/or bodily injuries with expenses that are hundreds of thousands of dollars in excess of minimum liability insurance protection. Purchasing liability coverage with a limit higher than the state minimum can be very helpful but it won’t cover every scenario. There are additional types of car insurance coverage that you can purchase to protect against the wide range of vehicle-related costs.

Collision and Comprehensive

While property damage liability insurance will help you pay for damage to other people’s property, collision and comprehensive insurance will help pay for damage to your own property. Collision insurance specifically covers damage to your car that is caused by an automobile collision. Comprehensive insurance typically covers car damage that is caused by weather conditions, theft, vandalism, or natural disasters. Collision and Comprehensive coverages are popular with people who live in a city, often drive in bad weather, or commute in rush hour traffic.

Underinsured and Uninsured Motorists

As mentioned above, many serious car accidents result in damages and expenses well beyond the minimum liability limits required by law.

Underinsured Motorist coverage will protect you if the other driver’s insurance coverage is not enough to cover the damages you suffered. Unfortunately, you may be involved in an accident with a driver who did not have even the legal minimum liability coverage. In such a situation, you would be protected if you purchased Uninsured Motorists coverage.

Personal Injury Protection

Personal Injury Protection (sometimes referred to as “No Fault Coverage”) will cover medical expenses not covered by another driver’s liability coverage.

There are some states that require this type of coverage, with the goals of expediting insurance payments for medical expenses and avoiding lawsuits over driver negligence.

Balancing Deductibles and Premiums

If you are involved in an accident, you will have to pay the deductible stated in the policy and the insurance company will pay the remaining expenses up to your policy’s limits. Deductibles commonly range from $250 to $1,000. The annual or monthly premium for a policy will normally be lower if you agree to pay a higher deductible. However, if you agree to a high deductible it is important to make sure you have enough cash available to pay the deductible in the event of an insurance claim.

Shopping for Car Insurance

There are a number of car insurance companies competing for your business. Before you begin shopping for car insurance, you should have a good idea of the claim limits and the types of coverage that you want. Make sure all the options you compare will provide the same level of protection.

Ask the insurers if they provide discounts for driving a safe car, having a good driving history, or other factors. It is also important to check for customer satisfaction ratings so you know your insurer will be a help and not a hindrance in the event of an accident.

Car insurance is not just a legal obligation, it is a way to protect your financial security. Hopefully you will never have to file a car insurance claim. But if you are involved in an accident, you will be happy to have an insurance company to help you deal with the costs and move on with your life.

Other Enhanced Insurance articles related to Car Insurance:

When Do I Need to Get Temporary Car Insurance

Can My Friend Be on My Insurance Policy

What Coverage Do I Need when Leasing a Car

Does My Car Insurance Cover a Friend

How Many Drivers Can I Have on My Insurance Policy?

Is My New Car Covered by My Insurance?

GAP Insurance

Rental Car Insurance

Bodily Injury Coverage

Does Car Insurance Cover the Car or the Driver

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.

Leave a Comment

Your email address will not be published. Required fields are marked *