Auto insurance is smart planning that can help protect you from expensive, sometimes devastating surprises.
Types of auto insurance
Liability coverage is the most important coverage and is required in most states. Basically, if you cause an accident, hurt someone or damage someone’s property, it can pay for covered damages and to defend you if a lawsuit results.
Collision coverage helps pay for damage to your vehicle if your car hits another car or object, is hit by another car, or your vehicle rolls over. This coverage is generally required if your car is financed or leased.
Comprehensive coverage helps pay for damage to your vehicle that is not caused by a collision. Examples include theft, vandalism, hitting a deer or other animal, storms and certain natural disasters.
Medical payments coverage:
Medical payments coverage helps pay for covered medical expenses for anyone injured while in your vehicle, regardless of who is at fault. Uninsured/underinsured motorist coverage can help pay for damages and medical costs resulting from an accident caused by someone who has no insurance or inadequate insurance coverage.
Why buy Auto Insurance?
- To remain legal while on the road. Not all states require auto insurance, but all 50 states do require financial responsibility. That means that you have to prove that you will financially able to deal with the costs of an accident either through a valid insurance policy, a bond or other means allowable in your state.
- To protect your vehicle. For the average person, their car is their second most expensive investment. The more that you rely on your car and the less able you are to replace it out of pocket if something happens to it, the more vital auto insurance becomes.
- To protect the health and welfare of your family
- You Will Have Medical Protection
Serious accidents sometimes occur. However, because medical costs are rising on a daily basis, it is imperative that the auto insurance policy you choose makes provisions for hospitalization and even post-surgical procedures, like physical therapy.
Key factors to consider for Auto Insurance:
Coverage and deductibles
Auto insurance providers allow you to choose your deductible and decide whether to add additional coverage that isn’t necessarily required by the laws in your state. Compare car insurance, the specifics of your coverage and deductibles play a major role in your monthly payment.
Typically, choosing a higher deductible means a lower monthly payment; choosing a lower deductible means a higher monthly payment. Additional coverage gives you added financial protection, depending on the claim, but also adds to your monthly costs.
What you drive
By collecting a large amount of data from customer claims and analysing industry safety reports, auto insurance providers often develop vehicle safety ratings and offer discounts to customers who drive safer vehicles.
Some insurers increase premiums for cars more susceptible to damage, occupant injury, or theft, and lower rates for those that fare better than the norm.
Before you head down to the dealership, do some research? Does the vehicle that has caught your eye have strong safety ratings? Is the same particular model often stolen? Knowing the answers to a few simple questions can go a long way in keeping your rates low.
How often, how far you drive
People who use their car for business and long-distance commuting normally pay more than those who drive less. The more miles you drive in a year, the higher the chances of an accident – regardless of how safe a driver you are.
Consider joining a car or van pool and other ways to drive less. If you reduce your total annual driving mileage enough, you may lower your premiums.
4. Your driving record
Drivers who cause accidents generally must pay more than those who are accident-free for several years. If you’ve been accident-free for a long period of time, don’t get complacent! Remain vigilant and maintain your good driving habits. As time goes on, the effect of past accidents on your premiums will decrease.
5. Your age, sex and marital status
Accident rates are higher for all drivers under age 25, especially young males and single males. Insurance prices in most states reflect these differences.
If you’re a student, your car insurance rates might also be in line for a discount. Most auto insurers provide discounts to student-drivers who maintain strong grades. In some states, younger drivers are also able to take driver safety courses that will lower premiums.
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