From billboards to television commercials and even magazine pages, advertisements for auto insurance have become part of our everyday lives. You can find insurance quotes just about anywhere, and for good reason.
Most states require a specific amount of minimum insurance coverage for road vehicles. Auto insurance then protects drivers and their passengers from financial concerns in the case of traffic collisions that result in physical or property damages.
Cars, trucks and motorcycles are all covered by auto insurance. The owner typically pays a monthly fee called a premium, and the insurance company agrees to pay for covered damages to the vehicle. The premium is calculated using a number of risk factors of the driver, including age, occupation and the area where the vehicle will be driven or stored. Once the vehicle owner obtains proof of insurance, they can drive as they please.
States also require that drivers keep a copy of their insurance card in their vehicle at all times in case of an accident or other vehicle-related problems on the road.
Why Is Auto Insurance Important?
Aside from being a law in most states, drivers greatly benefit from auto insurance. In case of an accident or severe damage to your vehicle, the insurance company provides a safeguard for the expenses covered by their policy.
Even if you consider yourself a perfect driver who never needs to worry about auto insurance, it's just as useful in protecting you and your passengers from other drivers on the road who aren't as careful.
Even if you never need to use your auto insurance, simply having a policy can give you the peace of mind in knowing that there's financial assistance just in case.
Types Of Auto Coverage
Depending on the policy that you choose and the risks you want covered, there are several categories in which your vehicle can be insured.
If you're found at fault in a traffic collision, liability coverage covers repairs, medical expenses for passengers in the vehicle, and any other additional fees stemming from the accident. Bodily injury liability covers the cost of injuries sustained by people involved in the accident, and property damage liability is used to handle any physical damage that you may cause, such as a wrecked vehicle.
Collision coverage pays for damages done to your own car if you hit another vehicle or a roadside object. Drivers must first pay a deductible, an up-front amount out of pocket, before the insurance company will pay to repair the rest of your vehicle. Typically, a smaller deductible means paying a larger premium each month.
In the event that another driver causes an accident and doesn't have sufficient insurance to pay for damages, this helps take care of any injuries or expenses. It is also useful in the case of a hit-and-run if the other driver flees and you can't file a claim.
Also requiring a deductible, comprehensive coverage handles any situation that isn't considered a collision with another vehicle. If you hit an animal while driving or a large object falls on your car, it's covered. Comprehensive coverage even reimburses you if someone steals or vandalizes your car.
If you or any of your passengers are injured in a collision, this helps cover the expenses, regardless of who's at fault. It even covers any injuries you may suffer while riding as a passenger in someone else's vehicle.
Auto insurance policies often allow drivers to sign up for rental reimbursement and roadside assistance. Though it means a higher premium, roadside assistance will provide service to have your car towed, a tire changed or a battery charged for no extra fee. Rental reimbursement covers the expenses if your car is out of service and you need a replacement vehicle.
Finding The Right Policy
Most insurance companies have their own risk calculations when it comes to insuring drivers, and they change the monthly premium accordingly. Drivers with no accidents or traffic tickets on their record are likely to receive cheaper rates than those who have been in multiple wrecks with several road violations.
Not every company uses the same formula for calculations, but all of them weigh the following factors:
- Driving record
- Vehicle year, make, and model
- Age, gender, and marital status
- Credit history
- Average driving distance in a year
- Insurance claims history
Before you go immediately to calling the number on your television or signing up for quick insurance online, it's best to visit multiple insurance providers and compare to see what would work best for you. Look up your state and find the minimum amount of insurance required to legally drive, as well.
Filing A Claim
After taking the time to find an insurance policy that fits, you'll be thankful if you have to file a claim after an accident.
To file a claim, first call your insurance agent to determine if you're covered for the accident, regardless of who's at fault. Your agent will let you know what to do next and what forms are needed to file your claim. Make sure you keep good record of the claim files, and keep copies of every form. If there's a police report from the accident, get a copy.
Once everything is set in motion, follow up with your insurance agent to make sure you followed all of the proper steps. Since individual states may have different procedures for filing claims, be sure to familiarize yourself with the process in your state.
What Auto Insurance Provides
Having auto insurance essentially means you can get around without worry. If you have full coverage on your vehicle, you're safe from most major expenses that can occur, even if you're at fault. You can be confident in knowing that the insurance company will pay for damages to your car and handle any medical costs for which you're covered.
Though your premium may go up after an accident, auto insurance provides each driver a safety net to prevent any major financial losses.