The Beginner’s Guide to Car Insurance
What exactly does car insurance cover? We break down all the basics including liability collision, bodily injury, premiums, and deductibles, in this guide.
Are you planning to buy your first car?
Whether it’s a used or brand new vehicle, safety is paramount. In the discussion of safety, buying car insurance is a must for first-time car owners.
About 6 million car accidents happen every year in the United States. It results in over 3 million injuries. Moreover, around 90 people pass away because of these road mishaps.
Not everyone can take the physical, mental, and emotional impact of vehicular accidents. Once the medical expenses kick in, people find themselves in a much deeper hole. However, car insurance can brace the financial impact of car accidents.
Continue reading below for a car insurance guide for beginners.
What Is Car Insurance?
Before we go into the details of the coverage, let us define car insurance. Auto insurance is a contract binding the car owner and the insurance company. The contract states the car owner agrees to pay premiums to the insurance provider.
In return, the insurance company protects against financial losses. These losses stem from vehicular accidents or damages to the vehicle.
The minimum requirements for car insurance coverage differ depending on the state you reside in. For example, the requirements of car insurance in NH are different from car insurance in ME.
Interestingly, New Hampshire requires car owners to secure a minimum amount of coverage. It applies to both damage and bodily injury liabilities.
Failing to secure the minimum car insurance requirements leads to certain repercussions. These include fines, license revocation, and jail time for repeat offenses.
The Types of Coverage: Collision
The first type of car insurance coverage involves collisions. A collision happens when you’re on the wheel and hit another vehicle. In this case, it won’t matter who’s at fault for the accident.
The car collision coverage will help pay for the repairs or replacement of your vehicle. If the damages are extensive and the cost of repairs goes over the value of your vehicle, the insurance company will likely give you a check amounting to the total value of your car.
Additionally, this type of coverage isn’t mandatory. Thus, car collision coverage is essential for brand new vehicles or recent car models.
Take note, collision coverage won’t apply to the damages of the other party’s vehicle. Also, it’s more expensive compared to liability insurance with a deductible.
Property damage liability coverage applies not only to the other party’s vehicle but also to damages to property. For example, you’re driving on a slippery road and a deer comes crossing the street. You maneuver to your left to avoid hitting the animal.
In turn, you hit the fence of the property. In this case, your property damage liability coverage will pay for the repairs or replacement of the fence. This type of coverage doesn’t pay for damages to your vehicle.
Also, property damage liability is mandatory across the nation. However, the minimum coverage limits vary per state.
This type of coverage helps you pay for expenses arising from the injuries on both parties. If the collision results in injuries or death, bodily injury coverage will kick in. It will pay for your medical, treatment, and rehabilitation expenses.
The same thing goes for your passengers. The insurance also covers the driver and the passengers from the other vehicle. In case the accident results in death, the insurance pays for the funeral and legal expenses.
The coverage also extends to the pain and suffering and loss of income. Like other types of coverage, it has minimum limits. Moreover, it’s mandatory in most areas in the country.
Last but not least is the comprehensive coverage. It covers damages arising from everything else outside of a car accident or collision. For starters, comprehensive insurance pays for damages related to theft and vandalism.
If somebody smashes your windows or windshields, comprehensive coverage will shoulder the replacements. In case an animal damages your vehicle, it also covers the repairs.
Interestingly, comprehensive coverage can also pay for damages from acts of nature. It includes storms, earthquakes, and falling rocks or trees.
If your vehicle falls in the hands of car thieves, comprehensive insurance can also help with replacements.
How Much Does Car Insurance Cost?
When dealing with the cost of car insurance, two factors play significant roles. These factors are the premiums and deductibles.
Premiums vary depending on key factors. These include your age, driving experience, and gender. It also considers your accident and moving violation history.
If you’re buying your car through car financing, the lender may ask you to buy specific types of car insurance. If you have a poor driving record, expect the premiums to go up.
Meanwhile, the deductible is the amount you will shoulder when filing a claim for the damages. If your insurance comes with a $500 deductible, you will have to pay the insurance company $500 for the claim.
The Need to Cover Your Vehicle
Ensuring your vehicle comes with many benefits. Firstly, car insurance is mandatory in your area. You can’t drive your vehicle without ample coverage.
Another is the financial protection it offers. Accidents can be very costly. It can wipe out your savings and livelihood in an instant.
Car insurance lessens the impact of car accidents on your finances. It also extends protection to your passengers. When it comes to your damaged car, insurance can pay for expensive parts and labor.
It also protects you in case an uninsured driver damages your vehicle.
Get the Best Car Insurance Coverage Today!
With dependable car insurance, you can drive your vehicle more confidently. You can protect your family from financial burdens arising from vehicular accidents. If you’re still searching for a trusted car insurance provider, you came to the right place.
Connect with us and request a free insurance quote. Let’s discuss your options and enjoy top-notch security soon.