Do you need car insurance?
Auto insurance is essential if you’re a vehicle owner. It protects you from liability if you make a mistake, and it protects your car if it’s damaged by another car. If you don’t have car insurance, not only are you breaking the law, you’re risking your financial well-being. Here’s how to get it:
Understand What Insurance Is
If you don’t understand how insurance works, you’re ripe to get ripped off. Take a few minutes to learn the basics about insurance policies. Then you’ll be ready to tackle car insurance in particular.
If you don’t have the time, here’s a quick and dirty run-down… Insurance policies have five main parts: premiums (price), co-pays, deductibles, policy coverage/limits (the devil is in the details), and claims procedures. All of these parts will work together to make a policy good/bad/expensive/cheap/risky/safe.
How to Shop for Car Insurance
When shopping for car insurance, take it one step at a time.
- See what your state requires you to have.
- Determine what you can afford beyond the minimum.
- Decide what kind of coverage you want.
- Get some price quotes and look for the right policy.
Coverage Types
To better understand what type of car insurance policy you should get, it is best to start by knowing what types of coverage there are out there.
- Collision insurance protects you in the event of a car accident. It covers any damage your car sustains to the limits of the policy.
- Comprehensive coverage will cover damage to your car that is not the result of an accident. If your car gets weather damage or is vandalized or stolen, then this comprehensive plan will cover your losses.
- Medical coverage covers medical expenses from a car accident, even if you are at fault.
- Personal Injury protection is actually required in some states, so be sure to check if your state is one. PIP will pay for medical treatment after a car accident, regardless of fault.
- Rental Reimbursement is an added coverage that will pay for a rental car, if your car is in the shop due to accident-related damage.
- Uninsured Motorist coverage will pay for damages resulting from an accident with an uninsured motorist. If you get into an accident with someone who doesn’t have insurance, you can end up covering the loss yourself, if you don’t have this protection.
The above coverage types can be packaged together in many different ways. They can be mixed and matched to make the best policy for you.
Pricing
The price of car insurance plans vary greatly from company to company. However, there are some factors that all insurance providers will take into account when calculating your policy price:
- Your Car
- The type of car you drive is going to greatly impact your price. Most companies will have a sliding scale for policy costs based on the make, model, mileage, age and value of the vehicle. Basically, the cheaper your vehicle, the cheaper your policy.
- Where You Live
- Your location is also going to factor into your policy price. Relevant factors include crime rates, accident rates, the state, and whether you live in an urban area.
- Driving Habits and You
- Your driving habits will also be considered in the price calculation. Some companies will charge more if you drive a lot.
- Your official driving record might come into question. An extensive history of traffic violations and accidents will raise your rate.
- Age, gender and martial status will also be taken into account. For example, younger drivers get into accidents more often, so most people under the age of 25 will have higher rates.
Deals – A lot of providers will also give special deals, like the ones you see in advertisements. Some are just a small break, but it never hurts to shop around to look for the best promotions.
Once you get your car insurance, make sure you register your vehicle.