Shopping for any insurance can be overwhelming, and many people would rather avoid it altogether but insurance is mandatory if you plan to be on the road driving a car. The only way to “get around” insurance is to educate yourself on the different insurance policies available and decide on what coverage works best for you. Essentially auto insurance covers three bases: You, the other driver, and your vehicle. Auto insurance would not be a necessity in an ideal world where there would be no accidents. However, in the real world, accidents occur every second. Consequently, auto insurance is a legal obligation that is mandatory in most states.
The benefits of carrying auto insurance are endless and work to protect you as the driver. If you are involved in an accident, the damages can set you back a massive amount of money or, in some cases, leave you with life-threatening medical conditions. Auto insurance offers you protection, and you can drive at peace knowing that no matter what happens, you are covered. Insurance also helps your car maintain its value and covers you from any potential claims or lawsuits. Some of the advantages of getting auto insurance include
Damage
If your car is involved in an accident, your insurance coverage will pay for the repairs needed or replacement of the vehicle.
Bills & Expenses
Auto insurance covers medical bills that fall under bodily injuries you incur or the other driver involved in the accident. It also covers lawsuits and legal fees from the accident brought against you and any settlements from the case. Depending on the auto insurance, if a person dies from the accident, it pays benefits to the deceased's family.
Although auto insurance is mandatory in the United States, two states are exempt. New Hampshire and Virginia. However, Virginia drivers are required to pay an uninsured Motor Vehicle fee in place of purchasing car insurance. While in New Hampshire, it is recommended by the Division of Motor Vehicles to carry standard liability and property damage policies.
There are various auto insurance coverages available depending on the type of coverage you require. The average cost varies depending on your location and personal factors, including the type of motor vehicle, age, claims history, and experience. Here are some coverages that you might want to consider depending on what coverage you want.
Auto Liability Coverage
It is mandatory to carry liability coverage, which is the minimum legal requirement by law. The coverage offers two types of protection
Bodily Injury Liability- covers injuries to other people involved in an accident.
Property Damage Liability- covers damage caused to the other personal property, in this case, the car.
For example, if you cause an accident and the driver gets injured, the policy pays for vehicle damage and the medical expenses related to the accident.
Medical Payment Coverage
Suppose you are driving with family or carrying passengers in your car. You are involved in an accident; medical coverage pays medical expenses for both you and the passengers in your vehicle, irrespective of who is at fault. The cost covers doctor's visits, consultation, x-rays, treatment, and medication.
Medical payment coverage is optional in some states, but it would be wise to get the coverage, especially if you have a family.
Personal Injury Protection-PIP
Like medical coverage, PIP is not mandatory in most states. However, it provides medical coverage for injuries sustained from the accident regardless of who is at fault. Also known as no-fault insurance, it offers additional benefits such as replacing lost income, providing child care expenses, etc. Additionally, it offers extra protection depending on the limits you choose. For example, it not only covers you while in a car but also if you are hit by a vehicle while out walking, jogging, or riding a bike. In some instances, it covers funeral expenses if death was caused by accident.
Consequently, personal injury protection does not cover theft, damage to your vehicle, and the other car and any medical expenses exceeding your limits.
Collision Coverage
Suppose your vehicle is involved in a collision with another car or hits an object such as a wall, pole, etc., the coverage pays for repairs. In some cases, it replaces the vehicle to its actual value less your deductible.
Collision coverage does not cover theft, damage to another vehicle, or medical expenses. The coverage is not mandatory if you own the car. However, if your car is under some financing or leasing, the lender requires you to carry the policy.
Collision coverage covers damages to your vehicle regardless of fault.
Comprehensive Coverage
This policy covers damage to your car that is caused through vandalism, theft, fire, etc. Anything that is not covered under collision coverage. It is compulsory if the vehicle is through financing and requires payment of a deductible. The upside of the policy is that it covers the replacement of your car up to the actual cash value.
It does not cover damage from a collision and medical expenses.
Uninsured and Underinsured Motorist Coverage
Statistics show that 1 in 700 drivers on the road is uninsured. Protecting yourself is essential. Uninsured protects you if you are involved in an accident with a driver who does not have current auto insurance. Underinsured provides any additional protection when the other driver has insurance, but not enough to cover medical expenses. The two protections protect you financially from having to pay medical bills out of pocket arising from an accident with either an uninsured or underinsured driver.
Auto insurance is essential for you and protects you from financial losses if you are involved in an accident. It is also a requirement to carry auto insurance to protect other drivers on the road and property. It is important to note that auto insurance does not cover regular car service. Know the coverage you need for your car and the mandatory coverage required for your vehicle. Your car is an asset worth investing in through insurance.
The premiums paid for auto insurance largely depend on many factors. Most auto insurance policies are tailored to fit every individual, depending on the amount of coverage needed. Some of the factors cannot be controlled and work either for or against the parties involved. For instance, when you factor in gender in driving. Women generally are considered safer drivers than men and consequently enjoy lower discounts. Married couples are considered stable drivers and will enjoy certain benefits. In addition, age plays a significant role in the coverage premium. Older or younger drivers statistically cause fewer accidents. It should not discourage you if none of the factors work for you. There are other ways in which you can get the best auto insurance deals. You only need to know where to look, which questions to ask and how to get these deals. Here are some things that are within your control and will have an impact on your auto insurance premiums.
Switch Insurance Providers
You can get significant discounts just for changing your insurance provider. For example, saving 10% or 20% of your annual auto insurance on average will save you money and, better yet, receive better customer service. One way is to shop around and get quotes from different auto insurance providers. Ideally, you can shop and compare quotes every 6-12 months, the same period most auto insurance policies last.
To simplify the process, which sounds overwhelming, you can get an independent insurance agent to walk you through and advise on the best deals that you can get. Working with an agent with experience, expertise, and knowledge is worth every penny. Get a good agent with good reviews and an exceptionally professional portfolio. They will work with you to get you the best deals and save you some money.
You can invest the money saved in other ways, such as gifting yourself a vacation to unwind and relax your body and mind.
Sign up for a defensive driving course
A defensive driver's course can save you between 5% to 10% on your auto insurance premiums. The course teaches how to be a better driver and make sound decisions on the road depending on different circumstances and conditions. As a result, you could qualify for discounts and enjoy lower premiums on your auto insurance. The certification of defensive driving lasts up to three (3) years. Completing the course reduces your level of risk to auto insurance providers.
If you have a driving ticket or an accident in your record, a defensive driving course works to your advantage to mitigate your risk to the insurance providers. Safe drivers are less likely to file a claim and are rewarded with low premiums.
Being a safe driver essentially means having a clean driving record with no tickets, accidents. It is within your control to avoid drinking and driving, don't over-speeding, avoid texting while driving, don't run red lights, and don't tailgate other drivers. Have road courtesy by exercising patience and respecting other drivers and motorists.
Pay your auto insurance annually
The biggest bonus for paying your auto insurance annually is that it saves you a reasonable sum of money in the long run. Insurance companies offer discounts for paying in full, essentially because it makes it easier to manage the cost. Paying for your auto insurance monthly is costly for the insurance provider and comes with a processing fee to keep the policy active. Additionally, insurance providers require an initial 20% deposit of the annual fee. Adding some costs, month by month ends up being more costly. It also leaves you vulnerable to the possibility of the insurance provider increasing the rates or imposing other charges.
Making a full payment offers you peace of mind to know that you've finished with the insurance until it's time to renew.
Get multi-car policy
In general, it is less expensive to bundle two or more vehicles with the same insurer. A multi-car plan offers significant discounts on the policies carried. For a married couple using two different cars, having the cars insured on the same policy qualifies for a discount as well as owning a business vehicle. However, various insurance providers have other requirements to be eligible for the deals. Find a provider that offers benefits on the policy for having multiple cars.
Additionally, suppose you don't want to be on the same policy with your spouse or teenager. In that case, you can get an independent policy but inquire about discounts available for insuring a second car using the same address. You can both be on different policies and enjoy deals and lower premiums on the second car if used less often.
Safe driving history and habits
Being a good driver on the road and maintaining a squeaky clean driving record has good rewards. Insurance companies offer discounts to drivers for driving without any accidents for a specified number of years. Additionally, some companies will lower your deductible every year you go accident-free. If you and the passengers you carry always wear a seatbelt, it can score you a further discount on your medical expenses or personal injury protection of your premium.
Avoid making small claims
Whenever you decide to claim your auto insurance, no matter how small, be aware it will significantly impact your premium rates. Whether the claim was minor or you were not at fault during the accident does not matter to insurance providers.
Making too many claims as well could lead to your provider canceling your policy. In essence, you have become a risk and a liability to the insurer.
Some states cushion drivers by not increasing the premium if the damages caused are under a certain amount. However, accidents where you are deemed to be at fault increase the premium. Try to fix small repairs if the cost to repair the car is less than your deductible amount and to avoid increasing your premiums.
File an insurance claim if the damage caused is quite extensive and you cannot afford to pay, or it requires the insurance provider to pay for medical bills, or the damage falls under your policy coverage.
In conclusion, anyone can get deals and significant discounts on auto insurance. It will require being disciplined and working around your finances to save some money. Always be on the lookout for bargains. Keep your eyes and ears open. Auto insurance does not have to be expensive. Let your insurance work to your benefit.