Car Insurance OVerview

Let’s talk about car insurance. It’s a resource absolutely critical to your financial protection.

That’s right. Like all other kinds of insurance, the value of car insurance is to protect you from major expenses that you couldn’t afford otherwise. For example, auto insurance can help you repair a car that’s damaged in an accident, or pay hospital bills. Keep in mind that auto insurance can include many different types of insurance on one policy.

So what kinds of coverage do you need? You’ll find that some types of insurance are required to register a car in your state, while others are optional. Ask an insurance professional to learn more.

How much coverage is enough? In terms of your vehicle itself, the amount of coverage you need depends on how much you could afford to spend to repair or replace it. The higher the value of your car, the more coverage you should consider. For other forms of insurance, you should have enough to protect your assets in case you get sued. Again, it definitely makes sense to consult with insurance professionals, consider their advice, and then comparison shop before you buy.

smiling woman driving

Car insurance information

Auto insurance: Read this before you get behind the wheel

Auto insurance protects you, your passengers and your vehicle in the event of an accident, storm, vandalism or theft. What must be or can be covered by auto insurance is usually determined by state laws. Although laws vary from state to state, these types of protection are commonly included in an auto insurance policy:

  • Liability coverage pays for injuries and property damage if you are found at fault in a car accident.
  • Medical payments protection covers the cost of medical care (up to an amount set by the policy) for you and your passengers after an accident.
  • Personal injury protection covers your lost income if you are unable to work as a result of injuries related to an accident, and pays for medical expenses, replacement services and funeral costs.
  • Collision protection covers damage to your car caused by an accident.
  • Comprehensive coverage pays for repairing damage to your car due to a fire, theft, flood or vandalism.
  • Uninsured motorist or underinsured motorist protection pays for your medical expenses if you are hurt by a hit-and-run driver or a motorist who does not have any — or enough — insurance.

Optional protection for roadside assistance after an accident and reimbursement if you need to rent a car while yours is being repaired may also be available in your state.

Check Your State’s Limits

Most states require auto insurance. However, required coverage limits vary from state to state, so it is essential that you verify your state’s requirements and get the required insurance before you get behind the wheel.

Never drive without auto insurance. If you get into an accident as an uninsured motorist, you may have to pay for legal fees, medical bills and repair charges. These costs add up fast, and would likely cost a lot more money than the price of that auto insurance policy you should have purchased in the first place.

Review, Renew, Repeat

If you only review your auto insurance annually, you’re not alone—but you could be missing out on discounts that could reduce your premiums. To ensure you have the right amount of coverage and get the best rates, you should review your policy with an independent insurance agent every time you:

  • Buy a new or pre-owned vehicle.
    You’ll need to provide the year, make and model of the car you plan on purchasing. Note: Some insurance companies now offer discounts to hybrid-vehicle owners.
  • Move, or if your dependent child relocates to another city or state for college.
    A simple zip code change can dramatically impact your rates.
  • Change your daily commute.
    Traveling shorter distances each day (i.e., if you start working out of your home or your company moves) could decrease your rates.
  • Install anti-theft equipment.
    Adding an after-market security system could boost your savings on monthly premiums.
  • Receive report cards for your dependent child, if they are driving.
    Some insurance companies offer “good-student” discounts.