Even though car insurance is yet another added cost to your monthly auto bills, it exists for good reason. Car insurance essentially protects drivers that are involved in accidents – by faults of their own or not. In addition, there are certain car insurance plans that protect drivers from natural disasters and unexpected incidents. In the sections presented below, the team at DriversLicenseAdvisors.org has compiled details on everything you need to know about car insurance.
How Car Insurance Works
Car insurance provides liability, medical and property coverages to drivers of all ages who are legally licensed to operate motor vehicles in the United States. There are many different car insurance companies that currently operate throughout the country. The team at DriversLicenseAdvisors.org notes that some of the most popular automobile companies include: Progressive, GEICO, Allstate, State Farm, USAA, Esurance, Nationwide, Liberty Mutual and AAA.
The process begins with a driver contacting an insurance company or a broker to obtain auto insurance rates. Auto insurance rates are calculated based on your driving history (sometimes dating back up to seven years), which includes any traffic tickets you may have incurred and any accidents you may have been involved in. If you are not the safest driver, you pose a potential liability, as you may end up costing the car insurance company a hefty amount as a member. This factor may drive up your monthly premiums. However, the team at DriversLicenseAdivors.org also notes the potential rewards for safe drivers. Factors that come into play for lower car insurance rates include: a clean driving record, school enrollment and top-of-the-line auto safety features.
Once you receive car insurance quotes from several different companies, take the time to compare the rates. Then, you can choose the plan that best suits your budget and your needs, while taking into consideration the requirements of your state’s auto insurance laws.
Car Insurance Requirements and Types
Car insurance is required by all transportation departments across the United States. However, the requirements can vary from state to state. For instance, Michigan has some of the highest current insurance rates in the country, because of its no-fault insurance structure, which drives up premiums because drivers must purchase unlimited lifetime medical benefits as part of their policies. The state of Maine, on the other hand, is ranked lowest for car insurance prices because of the lack of urban areas with high traffic. The team at DriversLicenseAdvisors.org urges you to review your state’s requirements prior to purchasing an auto insurance policy.
The requirements are broken down into limits that are required for: bodily injury liability per person, bodily injury liability per accident and property damage liability per accident. The limits fluctuate heavily. For instance, in Colorado the breakdown is: $25,000/$30,000/$10,000, respectively. Meanwhile, in Alaska, the limits are set at: $50,000/$100,000/$25,000, respectively. These limits are determined by the states based on the habits of drivers, climate factors and more. In addition, some states require uninsured/underinsured motorist coverage, personal injury protection and coverage for medical payments. If you live in a state that does not require these three, you are still able to purchase these add-ons, in addition to collision coverage.
The Benefits of Car Insurance
The team at DriversLicenseAdvisors.org knows that a few hundred dollars extra for protection behind the wheel seems like a lot. However, there are benefits to your policy! For instance, car insurance alleviates the financial stressors of paying for a serious accident out-of-pocket. If your car is totaled, you may receive a hefty sum of your car’s worth from your car insurance provider. Or, if you are in a wreck that requires you to replace the bumper, the grille and the hood of your car, you may only be required to pay a fraction of the cost, thanks to your deductible. Depending on your plan, your car insurance company may also foot medical expenses related to your car troubles. Additionally, the team at DriversLicenseAdvisors.org encourages you to find out if your plan offers rental car coverage, which is a huge perk if your car is totaled or at the shop. Furthermore, probably one of the biggest benefits to note is that your car insurance is on your side if you are at fault in an accident. You are protected, even if you caused the collision – and that is peace of mind.