Auto insurance is an important consideration when you purchase a car. It’s also one of the things where grey areas are prevalent which could make your head spin even if you’ve read all of the fine print on their brochures. You’ll also be surprised by things you don’t know or understand correctly about them. Here are some of the most common questions you’ll hear about car insurance:
Is it Mandatory?
Yes, well mostly, there are a few states that like New Hampshire and Virginia that don’t require auto insurance for drivers. However, most states mandate that drivers should have some form of coverage for their car and themselves. The minimum they’ll require as coverage may be a liability insurance, additional medical coverage, or inclusion of uninsured motorists.
What Does it Cover?
Depending on the policy you purchased, the coverage differs from one another. You can have a bodily injury (BI) or property damage (PD) included to cover for damages sustained by other people and their property. A personal injury protection (PIP) is used to cover medical expenses and some of the damages. You can also include collision and comprehensive coverage for collisions or non-collision events like theft and vandalism. An uninsured and underinsured motorist (UM/UIM) policy protects when the driver at fault doesn’t have insurance.
How Much Coverage Do I Need?
This depends firstly on what your state requires you to have for your coverage. You can look up your DMV for more information about the details. The next is what you consider to be something you’re comfortable with. You can ask various providers the common question about what are the different coverage that clients usually include in their policy. Then you’ll have to ascertain if you can afford that particular coverage and if it’s worthy to have as protection.
It’s also possible to get the maximum car insurance with their available options. For example, UM/UIM is often forgotten by many owners but can be crucial depending on who uses your car. It’s not an expensive add-on and can even be more affordable than many comprehensive options. However, if you live in an area where there is a legitimate risk of theft and vandalism then opting for the latter insurance is advisable.
How Much Does it Cost?
The cost of insurance can vary greatly based on many factors. It includes age, status, address, average mileage, vehicle, credit status, and what inclusions you would have in your policy. In 2014, the Insurance Information Institute indicated that the average annual cost of a car insurance is estimated to be around $888. If you don’t want to spend a fortune on insurance, here are some ways to minimize the rates for your coverage:
- Have a clean driving record, meaning the less road incident you have the better rate you’re going to get from your providers.
- Go for a higher deductible.
- Bundle home and auto insurance
- Install a security system for your car
- Have a safe garage for your car.
- Update relevant information to your provider pertaining to the use of your car.
What is Rideshare Insurance?
With the advent of Uber, Lyft, and other ride-sharing platforms, people are earning something on the side through carpooling. Although ride-sharing companies have insurance for their participating drivers, coverage might be limited particularly if you’re not yet matched with a passenger. If you don’t use this app then you obviously wouldn’t need it. However, for people where they gain supplemental income or are doing full-time as a job.
What if I don’t Own a Car?
You can still buy insurance even if you don’t own a car. This is particularly common for people who often rent cars or are using a company car. It may not provide coverage similar to comprehensive insurance but it has the standard coverage such as liability and some added medical protection.
Does One Insurance Cover All Types of Vehicles?
Your standard insurance will cover a wide array of vehicle types, however, there are special types of vehicles that may need their own insurance. An RV, commercial truck, motorcycles, and ATVs will have a separate insurance that is readily available in most insurance providers.
There will be other questions that you’ll have when you go to your insurance provider, you can use the information above to ask further details or if you want to clarify things with them regarding their products. It’s important that you understand your policy so that you’ll be able to hit the road with the peace of mind that you’ll have some cushion if undesirable events happen to you or your car.
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