Car Insurance
December 29, 2022

How Much Is Car Insurance?

Car insurance premiums can vary significantly depending on a number of factors, including the type of coverage you select, your location, the make and model of your vehicle, your…

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Car insurance can be a confusing topic. How much coverage is enough? Are you going to be paying out of pocket for accidents that are your fault? What about those that aren’t your fault? With so many options, knowing all you can about car insurance is the first important step.

Basic Car Insurance Questions

There are so many options out there for car insurance, it can get confusing trying to find the right one for you, especially if you have questions. Here are answers to some of the most common questions about car insurance to help make your decision a little easier.

The act of getting insured is fairly easy. You will need to gather some necessary information to be given to the agency of your choice. Common information required is:

  • The age and sex of all drivers in the household, as well as their state driver’s license number.
  • The make, model and VIN (Vehicle Identification Number) of your vehicle.
  • The driving history of all drivers to be insured
  • The type of coverage you want

Once all information is obtained, the agency will give you a price quote. It is smart to get quotes from multiple agencies, as some will be better priced than others.

Car insurance can cover a wide array of things depending on your policy. Most state minimums require that your policy covers liability, personal injury protection and uninsured motorist protection up to a certain amount. More expensive policies can cover things like repairs from collision or crashes where your vehicle flips, or damage caused by storms, animals and even vandalism.

Car insurance does not cover personal items that are in the car. If items are damaged in an accident or stolen, your insurance company will not reimburse you for them. This includes items used for your car, like navigational systems and personal car televisions. Car insurance will also not cover damage that occurred when a person who lives with you but is not insured under your policy drives your vehicle. Your policy will not cover your car loan if your vehicle is totaled or customized parts added to your car by you not listed in the policy agreement. Finally, if you use your car for business purposes (Food delivery or transportation services like Uber or Lyft), your policy must state that coverage will be provided during those working times, otherwise, you are uninsured while working.

There are quite a few different types of car insurance. The most widely referred to are:

  • Liability: Covers bodily injury and personal property injury. This is the legally required form of car insurance to be allowed to drive in most states. It is used to pay for medical costs, personal injuries, and at fault property damages.
  • Collision: Helps pay for damage to your own car in cases of hitting another vehicle or fixed objects.
  • Comprehensive: This covers damage to your car that wouldn’t occur during a collision. This includes theft, vandalism, hitting an animal, or natural events (hail, floods, fires).

In most cases, minimum requirements for car insurance are not enough. In most accidents, the costs amount to more than the maximum covered by these bare minimum policies. If an accident occurs that costs more than the amount your insurance covers, then you can be held responsible for paying the difference.

Yes, car insurance is a legal requirement in all states aside from New Hampshire and Virginia. In these states, you still must pay an uninsured motorist fee or be able to prove that you can pay out of pocket in case of an accident.

The benefits of auto insurance far outweigh the costs. There were over six million car accidents reported in 2015, so your odds of getting into at least a fender bender are higher than we wish to imagine. Protecting yourself with insurance can provide these perks:

  • Protection from massive expenses: A study in 2013 showed that the average claim for bodily injury in a car accident was over $15,000, while the average property damage claimed was over $3,000. Without car insurance, it would be your responsibility to foot these bills if you are found at fault or if the other driver did not have insurance.
  • Legal Protection: In most cases, it is the law to have car insurance. You must prove you have insurance to register your car and show proof of insurance for traffic stops. You could have the added peace of mind of avoiding an unnecessary ticket.
  • Auto Replacement: In some cases, the damage may be extensive and you will need to repair or replace your vehicle. Insurance will either cover that or take a large portion of the cost away.

Car Insurance Tips

There are so many moving parts to car insurance that it can almost seem overwhelming with all the choices, especially if you are getting the hard sell from your insurance agent. Here are some tips to help you figure out what kind of coverage is right for you and how to save a little on your car insurance.

There are many factors that go into choosing appropriate coverage since everyone has different driving habits.

  • Liability: Unless the minimum is all you can afford, avoid cutting costs here because it could leave you with large bills later. Most financial advisers suggest 100,000 for bodily injury liability, 300,000 for bodily injury per accident and 100,000 for personal property coverage. If you own a high-priced car or home, it may benefit you to insure even higher because if you were to go over the coverage you have, your assets can be legally confiscated to pay settlements.
  • Collision: This is highly recommended if your car is less than ten years old or if you could not afford to repair it yourself in case of an accident.
  • Comprehensive: This type of insurance is important if you live in an area with flooding or tornadoes, crime, or a heavy deer population.

Insurance costs can be daunting, but sometimes there are ways to effectively cut your payments. Here are a few tips on how to keep the costs down:

  • Keep a Clean Driving Record: One of the biggest influences in the price of your auto insurance premium is your driving record. Speeding tickets, accidents, OMVI and other moving violations can have a heavy impact on your driving record, which will cause higher priced auto insurance bills. Practice safe driving habits to ensure a clean record.
  • Shop around for the best quote: Different companies will charge different amounts for the same or comparable coverage. Get multiple quotes and go for the one with the most amount of coverage for the best price.
  • Ask About Discounts: Most insurance companies give discounts to insured motorist for various things. Some common discounts are given to with: Good Student qualifications, Anti-theft Devices, Multiple Cars and Low Annual Mileage.