What Every Driver Needs to Know About Car Insurance
Car insurance is a must for anyone who regularly drives. It protects you and any family members who live in your household.
To get an accurate quote, the insurance company will need your driver’s license information, vehicle information (make, model, and VIN), and odometer reading. You should also have any relevant claims and accident history handy.
Most car insurance policies, such as https://carinsurancecheap.net/, include several coverage types. Some, like liability coverage, are required by state law; others, such as uninsured motorist and comprehensive coverage, are optional. Understanding the basics of these coverages allows drivers to select a policy that meets their needs while keeping costs low.
For example, while many car insurance myths persist (such as red cars costing more to insure), most insurers consider a variety of factors when setting premium prices, including the make and model of a vehicle, its value, the driving history of drivers in the household, and whether it has built-in security features. Drivers can also expect to pay a deductible for each claim, which resets with every vehicle use.
Generally, drivers who live in the same household and regularly drive the same vehicle are covered by a family policy. But the question about extended family members, friends, and neighbors gets murkier. Typically, these people will need to be added as insured drivers if they’re permitted to do so by the vehicle owner.
Almost every state requires car owners to carry liability insurance. This type of coverage protects you if another person claims you, alleging that you were negligent and caused harm to them or their property. Your premium is affected by several factors, including your driving record, how long you’ve been on the road, and where you live, as some areas have higher incidences of accidents and thefts.
Consider underinsured motorist coverage, which covers costs related to an accident caused by a driver who does not have or isn’t carrying enough auto insurance. You can typically purchase additional UM/UIM coverage for a modest price increase.
Optional policy add-ons include personal injury protection (PIP) and comprehensive coverage. PIP covers medical expenses from an accident, while comprehensive coverage reimburses damage to your vehicle caused by theft, vandalism, or uncontrollable factors. It would help if you discussed these options with your agent or insurer to decide what’s best for you.
If you have collision coverage, your insurance will pay for damages to your car from an accident with another vehicle or object. It also covers damage caused by things that are not accidents, like falling debris during a storm.
This coverage is not required by law, but the lienholder will likely need it if you’re leasing or financing your car. It’s also worth having if your vehicle is old and costly to repair or replace in an accident.
The value of collision coverage will depend on your circumstances, such as how much it would cost to repair your car or how often you let others drive it (permissive use). It would help if you also considered the value of a deductible, the amount you must pay out of pocket before your insurance kicks in, and how that relates to your premium. A lower deductible generally means higher rates, and vice versa.
Generally, comprehensive coverage protects against damage from non-collision incidents. Examples include theft, fires, and damage caused by an animal (like a bear lumbering across the highway). Like collision, comprehensive policies have deductibles and pay out only for the actual cash value of your car, not for what you owe on the vehicle if you still have a loan or lease.
Your premium may be based on your age, gender, marital status, where you live, and your driving history. Some insurers also use your credit score in calculating your policy. This is a controversial practice because it can unfairly penalize lower-income drivers. Still, insurance companies claim that people with poor credit drive less safely and tend to have more accident claims.
Whether you need comprehensive coverage depends on the value of your car, your financing situation, and where you live.