Car Insurance Basics
How does car insurance work?
Car insurance protects your financial well-being and your car in the event of an accident, theft, or other unforeseen occurrence. Your automobile insurance provider may cover vehicle repairs, medical bills, and damages or injuries caused by another motorist. Your insurance protects you up to specific limitations that you and your insurer have agreed upon. Remember that automobile insurance does not cover routine maintenance or ordinary wear and tear.
Is it necessary for me to get vehicle insurance?
Except for New Hampshire, all states mandate auto insurance (New Hampshire still demands financial responsibility if you cause an accident, so you'll want to be fully insured). Driving without insurance may result in a fine, suspension of your license, or possibly jail time.
What exactly does vehicle insurance cover?
Auto insurance protects you against a wide range of disasters that can happen on or off the road. Although coverages vary by state, the following are the basic coverages included in most vehicle insurance policies:
Liability - In 49 states, auto liability insurance is mandatory. If you are judged to be at fault in an automobile accident, liability coverage can pay for damage to other cars, damage to items, injuries to other drivers and passengers, and litigation if you are sued as a result of the event.
Comprehensive - Comprehensive coverage protects your vehicle from damage caused by circumstances beyond your control, such as theft, windshield and glass damage, vandalism, fallen trees, and more.
Collision - Collision coverage protects your car if it collides with another vehicle or object, such as a tree, railing, or fence.
Personal Injury Protection/Medical Payments (PIP) - Medical payments coverage is provided in most states, but personal injury protection is a larger coverage that is only accessible in places that require it. Both pay for medical expenses if you or your passengers are harmed in a vehicle accident (regardless of fault).
Uninsured/Underinsured Motorist Bodily Injury (UIM) and Property Damage (UMPD) UIM can pay for injuries to you and your passengers if you are hit by a motorist who does not have insurance or has insufficient coverage. If your car is damaged in an accident caused by an uninsured or underinsured motorist, UMPD may pay to repair or replace it.
Other optional protections - Rental car reimbursement, loan/lease repayment (also known as gap coverage), and roadside assistance can all be added to your policy (or may be included with certain companies).
What isn't covered by car insurance?
Wear and tear, persons who regularly use your car but aren't mentioned on your policy, and driving on a ridesharing platform aren't covered by a standard auto insurance policy. However, you may occasionally increase coverage or purchase a separate insurance or warranty to cover items that your vehicle policy does not cover.
How much does vehicle insurance cost?
When pricing your auto policy, insurers take into account a variety of criteria, including your age, driving history, region, and vehicle type. Car insurance can be expensive because it covers both the vehicle and the individuals. The cost of a policy can vary greatly from $200 to several thousand dollars. Learn more about the variables that influence vehicle insurance costs and the typical cost of automobile insurance.
What is the definition of a vehicle insurance premium?
The amount of money you pay your vehicle insurance provider in return for coverage is referred to as your premium. In most cases, you can pay your subscription either monthly or in full.
What is the definition of a vehicle insurance deductible?
Your deductible is the amount you must pay out of pocket before your insurance will cover your claim.
For example, suppose you had a $500 deductible and your automobile was hit by a telephone pole, resulting in a $2,000 repair bill. You will pay $500, and your insurance company will cover the remaining $1,500. Your deductible amount can be chosen from the alternatives provided by your insurance company.
The larger your deductible, the greater your share of the claim expense. That implies your out-of-pocket expenses will be higher, but your total rate will be cheaper, and vice versa. Learn more about deductibles.
Is automobile insurance included in the cost of maintenance?
Auto insurance does not cover maintenance, mechanical problems, or wear and tear on your car. If your car breaks down anywhere in the United States or Canada, roadside assistance coverage can cover the cost of a tow to the nearest repair.