Auto insurance is a policy that protects you and your vehicle, as well as damage or injuries to others you may cause by an accident. It ensures that you are financially protected and have the peace of mind you need should anything happen.
Auto insurance has many different coverage options that may vary by carrier or state.
Your independent insurance agent will work with you to determine the best coverages to have are based on your needs and budget. These coverage options can include:
- Liability Coverage. Liability coverage is legally required in most US states to drive a car. This coverage covers damages for bodily injury and property damage to others for which you are legally responsible as the result of an accident.
- Collision Insurance. Collision insurance covers damage to your car resulting from an accident in which you collide with another vehicle or object. It either repairs or can even replace an insured vehicle should you select that type of coverage.
- Comprehensive Insurance. Comprehensive insurance can provide coverage for accidents not covered by collision insurance. These may include vandalism, certain weather events and accidents with animals.
- Uninsured Motorist Insurance. Uninsured motorist insurance protects you when injured by an uninsured driver including hit-and-run accidents. This coverage is most often paired with underinsured motorist insurance.
- Underinsured Motorist Insurance. Underinsured motorist insurance protects you when injured by a driver whose insurance is not enough to cover your costs.
- Medical or Personal Injury Protection. Medical payments coverage can help pay medical costs related to a covered accident, regardless of who is at fault. Personal injury protection insurance covers certain medical expenses and loss of income resulting from an accident the insured is at fault for. This coverage greatly varies by state.
- Gap Insurance. Car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a car loan. Gap insurance may help certain drivers cover the amount owed on the loan after a total loss or theft.
- Rental Reimbursement Insurance. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.
One of the biggest questions that people always have regarding auto insurance is the cost.
The cost of auto insurance depends on a lot of factors.
These may include:
- Coverages. The coverages you choose will play a large role in determining the cost. A state minimum liability policy will likely cost less than a policy with increased and optional coverages selected.
- Age. Drivers in different age groups pose different risks, which is why rates tend to differ based on the age of the drivers in the household.
- Policy Limits. Although all auto policies have a minimum amount, you can raise your policy limits depending on the level of protection you want.
- Location. Geography, weather and population density are all factors in the price of your car insurance.
- Driving Record. Insurance providers want to see demonstrated responsible behavior, which is why traffic accidents and citations are factors in determining car insurance rates.
- Type of Car You Drive. The price, style, and age of your vehicle all contribute to how much car insurance will cost. For instance, a brand-new sports car will likely be more costly than, say, a five-year-old sedan.
- Deductible. If you choose a lower deductible, it will result in a higher insurance bill – which makes choosing a higher deductible seem like a pretty good deal. However, a higher deductible could mean paying more out of pocket in the event of an accident.
- Eligibility for Discounts. Your carrier may offer a variety of discounts on auto insurance. You can save money on your monthly bill by bundling policies, going paperless, driving accident-free and more.
Auto insurance is required in almost all states, however the requirements vary.
There are many different coverage options and each state or carrier will have different minimums that need to be met. When you are buying auto insurance, your independent agent will ask questions about you and your car as well as which options you are looking to include. They will recommend coverage options and limits based on your needs and budget, so you may choose what fits your needs. Once you are happy with your policy coverage selections, simply pay your premium. You and your agent can revisit your policy as needed to make sure things stay current and up to date as your needs change.