Accidents happen, and when they do, insurance is what keeps our finances safe and sound. Whether an auto collision is your fault or somebody else's, your car insurance coverage should help you. How much it helps, however, is up to you, and this is determined by the combination of options that comprise your insurance policy.
To figure out what works best for your car insurance needs—and your budget—here are some of the most important things to consider.
Liability coverage
Personal injury or personal liability coverage should be given great importance when putting together an insurance package. All states except New Hampshire require minimum amounts of liability insurance.
Liability coverage encompasses both bodily injury liability as well as property damage liability. One covers costs associated with injuries following an accident; the other covers costs associated with damage to personal or business property. Both can protect you financially from personal lawsuits stemming from accident.
Uninsured drivers
According to an Insurance Research Council (IRC) study, if someone is injured in an auto accident, the chances are about one-in-eight that the at-fault driver is uninsured. Don't trust other drivers and don't take for granted that they will have as good coverage as you do. Though it can be hard to digest that you must pay a premium and the deductible for someone else's mistake, it's better than forgoing this coverage and risking losing your vehicle.
Accidents and vehicle damage
You should never neglect the worst-case scenario when selecting insurance. What if your car is totaled and needs to be replaced? If the accident is not your fault, the other driver's insurance (or your uninsured motorist coverage) will pay for the vehicle. But there are other situations and natural calamities that can also destroy your vehicle, and in those cases, you'll only be able to rely on your own insurance. In case such a situation arises, it is better to have enough coverage to fully repair or replace your vehicle.
That includes both collision and comprehensive coverage. Collision coverage can help pay for damages stemming from an accident. Comprehensive coverage can help pay for damages related to things other than accidents. For example, if a tree branch falls on your tree or a hailstorm leads to damage, your comprehensive coverage could kick in.
Getting stranded
A vehicle is a combination of mechanical, electrical, and rubber parts. Things can go wrong at any time, and they are not always in your power to prevent. However, being prepared for those events is in your power if you add towing and rental coverage to your insurance. This might work out better than having a separate towing club membership, which could save you those annual fees.
As you consider how to buy car insurance, keep the following in mind.
Deductible vs. premium
The insurance deductible is inversely proportional to the premium amount. If the deductible goes up, the premium goes down and vice versa.4 This relationship reflects whether you prefer to pay more or less from your own pocket before stretching out your hand to the insurer. Whichever option you choose, make sure you can afford it. Some people are better off paying a higher monthly premium in exchange for a lower deductible to avoid any large payments after an accident.
Driving records and insurance rates
Many insurance companies automatically recommend certain coverage for particular drivers. For example, if you have a teen driver at home, it is better to have good personal liability coverage with a lower deductible because new drivers are prone to making mistakes. On top of that, rates to cover teen drivers will automatically be higher because of their lack of driving experience. Try not to let the higher rates prevent you from getting ample coverage.
Experienced drivers with past mistakes, such as moving violations or accidents, can also have higher premiums. Defensive driving courses help to offset some of the cost, but not all of it, so drive carefully and consciously to avoid paying higher premiums.
When comparing the best car insurance companies, here are a few things to look out for.
Reliable and Reasonable.
Insurance companies should be reliable and offer reasonable coverage for the prices they charge. In some states, there isn't much difference in price among insurance companies because of state mandates. In most states, however, companies will quote different prices for similar coverage.
Covers the Vehicle at All Times.
Many small insurance companies offer low rates compared to the big ones because of their lower overhead costs. But when there is an accident and an insurance claim is filed, these small companies can sometimes be difficult or uncooperative. They may respond with, "It's not covered under your policy." That's not what you want to hear when you really need them after paying your premiums for months. Also, don't go with a local insurance company that doesn't cover out-of-state accidents.
Getting quotes from multiple companies can give you a basis for comparison. From there, you can decide which insurer is the best fit in terms of coverage, deductibles and premiums.
When comparing car insurance options be sure to ask about safe driver or good student discounts that might be useful for lowering your premiums.
Having ample and reliable insurance coverage is a very important component of auto ownership: You don't want to experience money problems when you are already going through the trauma of an accident. Be a smart buyer, do the proper research, compare quotes, and create a package that suits both your coverage needs and your budget.
With some exceptions, most car insurance companies offer the following types of coverage:
What Coverage Do I Even Need?
Many drivers go by the minimum coverage amounts set by their state's regulations because it seems like the most affordable option. However, it’s important to understand what precisely what is included in each policy, before selecting which coverages to add and which to leave off.
In a recent interview with Douglas Heller, an auto insurance expert and consumer advocate, he explained that, "There's one additional type of coverage that is required—not by the government, but by your car lender. It's called comprehensive and collision coverage. If you don't own your car outright, say you have a loan, or are leasing your vehicle, the company financing the car, whether it's a bank, finance company, or lease company, will require comprehensive and collision."
What Should I Do When Comparing Car Insurance Companies?
When comparing insurance rates between multiple insurance companies, it’s important to keep several considerations in mind, including the actual coverage you’re receiving (including dollar amounts for each coverage), available discounts, the company’s financial strength rating, and the company’s customer service ratings. Make sure you understand everything about how car insurance works before making your final decision.
When choosing a car insurance company, consider your needs and prioritize your choice based on what is most important to you. While GEICO offers the lowest rates across the board, other companies like Amica offer the best claims satisfaction, Progressive offers great coverage for high-risk drivers, State Farm offers the most personalized experience, and USAA gives amazing discounts to military personnel.
- Car insurance is designed to protect you financially if you're involved in an accident or your vehicle is damaged.
- Liability insurance, collision coverage, comprehensive insurance and personal injury protection are some of the types of vehicle insurance you may need.
- Almost every state requires some type of liability coverage for drivers.
- Shopping around is important for finding the best deal on car insurance rates.
What Car Insurance Do You Need?
In order to protect yourself without overpaying, explore the factors you should consider in putting together the right coverage for your vehicle, as well as how to select a good insurance company that will handle your claims if an accident happens. It can be confusing, but remember that taking it step-by-step makes it a much easier experience.To figure out what works best for your car insurance needs—and your budget—here are some of the most important things to consider.
Liability coverage
Personal injury or personal liability coverage should be given great importance when putting together an insurance package. All states except New Hampshire require minimum amounts of liability insurance.
Liability coverage encompasses both bodily injury liability as well as property damage liability. One covers costs associated with injuries following an accident; the other covers costs associated with damage to personal or business property. Both can protect you financially from personal lawsuits stemming from accident.
Uninsured drivers
According to an Insurance Research Council (IRC) study, if someone is injured in an auto accident, the chances are about one-in-eight that the at-fault driver is uninsured. Don't trust other drivers and don't take for granted that they will have as good coverage as you do. Though it can be hard to digest that you must pay a premium and the deductible for someone else's mistake, it's better than forgoing this coverage and risking losing your vehicle.
Accidents and vehicle damage
You should never neglect the worst-case scenario when selecting insurance. What if your car is totaled and needs to be replaced? If the accident is not your fault, the other driver's insurance (or your uninsured motorist coverage) will pay for the vehicle. But there are other situations and natural calamities that can also destroy your vehicle, and in those cases, you'll only be able to rely on your own insurance. In case such a situation arises, it is better to have enough coverage to fully repair or replace your vehicle.
That includes both collision and comprehensive coverage. Collision coverage can help pay for damages stemming from an accident. Comprehensive coverage can help pay for damages related to things other than accidents. For example, if a tree branch falls on your tree or a hailstorm leads to damage, your comprehensive coverage could kick in.
Getting stranded
A vehicle is a combination of mechanical, electrical, and rubber parts. Things can go wrong at any time, and they are not always in your power to prevent. However, being prepared for those events is in your power if you add towing and rental coverage to your insurance. This might work out better than having a separate towing club membership, which could save you those annual fees.
Car Insurance Costs
Car insurance is a necessary expense but it's important to consider just what you're paying for. Paying more money for car insurance doesn't necessarily mean you have a better policy. Likewise, paying less for car insurance doesn't guarantee that you have the coverage you need.As you consider how to buy car insurance, keep the following in mind.
Deductible vs. premium
The insurance deductible is inversely proportional to the premium amount. If the deductible goes up, the premium goes down and vice versa.4 This relationship reflects whether you prefer to pay more or less from your own pocket before stretching out your hand to the insurer. Whichever option you choose, make sure you can afford it. Some people are better off paying a higher monthly premium in exchange for a lower deductible to avoid any large payments after an accident.
Driving records and insurance rates
Many insurance companies automatically recommend certain coverage for particular drivers. For example, if you have a teen driver at home, it is better to have good personal liability coverage with a lower deductible because new drivers are prone to making mistakes. On top of that, rates to cover teen drivers will automatically be higher because of their lack of driving experience. Try not to let the higher rates prevent you from getting ample coverage.
Experienced drivers with past mistakes, such as moving violations or accidents, can also have higher premiums. Defensive driving courses help to offset some of the cost, but not all of it, so drive carefully and consciously to avoid paying higher premiums.
How to Buy Car Insurance?
Choosing the right coverage is the first step to buying car insurance. The next is selecting a good insurance company. This can ensure that you're able to get the coverage you need at the rates you want while maximizing the chances that your claims will be paid.When comparing the best car insurance companies, here are a few things to look out for.
Reliable and Reasonable.
Insurance companies should be reliable and offer reasonable coverage for the prices they charge. In some states, there isn't much difference in price among insurance companies because of state mandates. In most states, however, companies will quote different prices for similar coverage.
Covers the Vehicle at All Times.
Many small insurance companies offer low rates compared to the big ones because of their lower overhead costs. But when there is an accident and an insurance claim is filed, these small companies can sometimes be difficult or uncooperative. They may respond with, "It's not covered under your policy." That's not what you want to hear when you really need them after paying your premiums for months. Also, don't go with a local insurance company that doesn't cover out-of-state accidents.
Getting quotes from multiple companies can give you a basis for comparison. From there, you can decide which insurer is the best fit in terms of coverage, deductibles and premiums.
When comparing car insurance options be sure to ask about safe driver or good student discounts that might be useful for lowering your premiums.
Having ample and reliable insurance coverage is a very important component of auto ownership: You don't want to experience money problems when you are already going through the trauma of an accident. Be a smart buyer, do the proper research, compare quotes, and create a package that suits both your coverage needs and your budget.
Frequently Asked Questions
What Coverage Options Are Available?With some exceptions, most car insurance companies offer the following types of coverage:
- Bodily Injury and Property Damage Liability, which pays for the other party's medical care and property damage if you’re found at fault in an auto accident.
- Collision Coverage, which pays for damage to your own car regardless of fault.
- Comprehensive Coverage, which pays for damage to your car in the event of weather damage or theft.
- Personal Injury Protection/Medical Payments, which covers your own medical expenses regardless of fault.
- Uninsured Motorist Coverage, which pays for your own medical and car repair bills if you are in an accident with an uninsured driver.
- Guaranteed Asset Protection (GAP) Coverage, which covers the gap between what is owed on your car's lease or loan and its current value if the accident caused a total loss.
What Coverage Do I Even Need?
Many drivers go by the minimum coverage amounts set by their state's regulations because it seems like the most affordable option. However, it’s important to understand what precisely what is included in each policy, before selecting which coverages to add and which to leave off.
In a recent interview with Douglas Heller, an auto insurance expert and consumer advocate, he explained that, "There's one additional type of coverage that is required—not by the government, but by your car lender. It's called comprehensive and collision coverage. If you don't own your car outright, say you have a loan, or are leasing your vehicle, the company financing the car, whether it's a bank, finance company, or lease company, will require comprehensive and collision."
What Should I Do When Comparing Car Insurance Companies?
When comparing insurance rates between multiple insurance companies, it’s important to keep several considerations in mind, including the actual coverage you’re receiving (including dollar amounts for each coverage), available discounts, the company’s financial strength rating, and the company’s customer service ratings. Make sure you understand everything about how car insurance works before making your final decision.
When choosing a car insurance company, consider your needs and prioritize your choice based on what is most important to you. While GEICO offers the lowest rates across the board, other companies like Amica offer the best claims satisfaction, Progressive offers great coverage for high-risk drivers, State Farm offers the most personalized experience, and USAA gives amazing discounts to military personnel.
Comments
Submitted by Arnold on Wed, 10/06/2021 - 15:01
Well I've been without a car for about a year now simply because I didn't need one. My question is, when I'm doing new insurance I realize that having a car uninsured raises how much you pay, but what if you just never had a car, are you still considered to be uninsured? Do you have to say you were without car insurance if you never had a car uninsured? In this situation would be it be better to get an insurance agent?
Submitted by Professional au... on Wed, 10/06/2021 - 15:03
Good question. Most people are so car-dependant that they start driving on their parent's insurance, then buy their own car, own insurance, and are never car-less throughout their lives. By all means talk with an independent insurance agent, they should be able to fix you up with something.
It might work like this: You fill out most of the forms at the insurance place, giving them info on you but of course not yet on the car, you go buy your car, or at least make a deal on it, but don't drive away yet.
Then call the insurance agent, tell them what you have bought, then they can complete the transaction, you go pick up your proof of insurance cards posthaste.
If you happen to get stopped between where you buy the car and the insurance office, hopefully the cop will listen to your story. If you are seriously worried about that you could (assuming you are doing the car deal somewhere there is a fax) have the insurance agent fax you proof of insurance. I'm assuming you do have a valid driver's license. Just sayin'.
The documents you normally need to have on you in a car are: 1. License 2. Proof of Insurance 3. Proof of registration (Tag Receipt)
Submitted by Jimmy on Wed, 10/06/2021 - 14:59
Somebody backed into my parked car last night. They did some pretty god damage to the rear side panel on the driver side. The driver of the other car left a not saying that they had already contacted their insurance Co. and left me the claim #.
My car is not woth much (Maybe $2K) and I am not interested in paying for cosmetic repairs. If I contact my insurance company eventhough this accident was not my fault, will I be on the hook to pay a deductible or should the other driver's insurance pay for everything?
Hopefully the damages do not exceed the value of my car. Since the other person already contacted their insurance agent, am I obligated to report the accident to my insurance Co. as well? In addition to not wanting to pay a deductible, I also don't want to have the insuracne company claim my car is "totalled" (It stil drives well but has a nice hige dent in the rear side).
Anyway, any tips peoplecan provide on how to handle a situation like this with an older car would be much appreciated. Thanks!
Submitted by Professional au... on Wed, 10/06/2021 - 15:02
Follow up with the other insurance company. The other driver has the responsibility to "make you whole" at this time. If his insurance company pays you for the estimated repairs to your car, you then have a choice about getting the car fully repaired. If the estimate is well past the threshold for totalling out the car, then he still has the responsibility to "make you whole" pre-accident damage. I'd be leary at this time that the driver ... who left the scene of an accident ... has left you honest information about the claim.
Call the agency or Ins co. and verify that the information is valid and that they will work to settle your claim against their insured. Don't hold your breath on this ... many insurance companies are not going to pay out without an accident report settling responsibility on their insured. You may have to sue the person in small claims (if you can now find them) to get a judgement ... and then go through all kinds of maneuvers to get paid, if at all. As for filing a claim with your own insurance company, you will be at risk of having your car totalled out.
Best to get a repair estimate from a body shop (at your expense) and know in advance if it's worth pursuing the claim on your comprehensive policy. If it amounts to most of the money coming out of your pocket in the way of deductible, and very little from the insurance company, it's probably not in your interest to make the claim. Plus, it's going to be questionable to them as to how the damage was caused ... since it doesn't sound like you filed a police report, either. Can you absolutely prove to them now that you didn't cause this damage yourself?
Submitted by SunKrist on Wed, 10/06/2021 - 14:56
I'm not really sure if this is the right place to post this question, but it seemed like the closest thing. I was wondering if anyone knew about adding a non-owner occasional driver to a car insurance policy. I've been delaying getting my unrestricted license because of the increase in insurance premiums for teenagers (I am now 19 and have had my permit for 4 years).
For several months now I've been contacting my parents' agent trying to discern exactly how much the increase would be. Finally, he e-mailed me today saying that it would be an additional $97/month, or nearly $1200/year.
This surprised me, to say the least, considering my older sister was 18 when she got her license, and had already bought an SUV (I do not own a car at all), yet the premium only went up $800/year for her (that was about 6 years ago). I would have thought it would be considerably less for me to be added, being that I am a year older and do not own a car.
So, I am just trying to figure out what I should do. I really didn't want to have to come up with an extra $100/month just to be able to drive my mom's car once in awhile. Maybe I should I just wait another year or two... If anyone has any advice, it would be much appreciated
Submitted by Professional au... on Wed, 10/06/2021 - 14:58
Best to check with the many Insurance companies in your area about this situation, and see what their costs are to have you on your Mom's policy. In many states, insurance companies automatically include teen drivers (and charge for them) if they are living in the household with the primary insured (your Mom).
The assumption is that you, as a licensed driver and not owning a car, will drive your Mom's car (with her permission, of course) from time to time. Historically, young men are more accident prone than young women, so the insurance company rates reflect this difference between you and your sister.
There are ways you can generally help to lower your insurance costs. Inquire about driver training or other safety classes, or "good student" discounts available to help with your rates. The most important thing is to "shop around" for your needs and find an agent that will work with you to get the best rates possible.
It also helps to be careful about the type of car you want to insure ... certain makes/models are much more expensive, especially if you're looking at a "performance" car, or a 4x4 truck, or cars with a poor accident safety history, and so forth. Essentially, you're paying for the perceived risk that an insurance company takes on for your premium.
Submitted by Gromit on Wed, 10/06/2021 - 14:48
My car was in an accident last year, I hit a deer, the collision shop said the damage was over $5,000 and the insurance company totaled the car. I opted to keep the car and repair it myself.
The insurance payout was $5,300, but deducted $1,000 to allow me to keep the car so I got a check for $4,300. It cost me $800 to fix the car myself, I replaced the hood, passenger headlight, condenser, used winch to bend radiator support back in to place, a couple of cans of touchup paint to paint the hood, zip ties and duct tape. Got the car to pass inspection.
I've been driving it the last 20,000 miles, I have liability only coverage now. So if someone damages my car and are found at fault, would their car insurance pay out the value of the car again?
While the car has a clean title, it's in the insurance's companies computers they already paid out on the car. If so is it the Kelly blue book value or $1,000 plus repairs minus deprecation?
Submitted by Rabrritt on Wed, 10/06/2021 - 14:54
Be careful, a former employee of mine wife went through this when she purchased her total vehicle and held the same clean title. After rebuilding , they went to trade in the vehicle.
The dealer would not purchase it as they stated the system shows a branded title.
After visiting state motor vehicles, turned out despite everything she was told, a branded e-title was issued on that vehicle. Since she just kept her old title and never checked to see what the State had, she wasn't aware a new title was issued that showed salvage rebuilt on it.
Submitted by admin on Wed, 10/06/2021 - 14:50
If someone else hits you and is at fault, their liability insurance will cover your damage at the rate of the salvage title, usually 20-40% less than the same car with clean title.
Hopefully you neve have to find out, but if KBB is $5,000 for example, the value in your case would be $3,000-$4,000.
Then there is the possible attempt by their insurer to blame the accident on the condition of your car.