It is easy to compare policies and prices when researching online, but insurance providers' unfamiliar words and phrases can be confusing. Long-held beliefs — or myths — about how car insurance works can confuse the decision-making process. Let us help you break down what you need to know about auto insurance in the U.S.
What Is Car Insurance?
Car insurance is a binding policy you sign with an insurance provider that protects you financially in an accident or possible theft. As a result of paying a premium, the insurance provider promises to pay your losses according to your policy.
Although U.S. law requires car owners and drivers to have proper car insurance, many people are still skeptical. There are multiple advantages to having your car insured, some of which are:
Time-efficient
A comprehensive auto insurance policy may help with towing, repairs, and replacements and cover the and coverers' damages, among others. When you file a car insurance claim, the insurance provider can assist you in managing the process and providing support.
Pay Now And Save Later
Car insurance can help you and your family avoid costly expenses. You can assist avoid future pricey charges by spending a small amount on your protection. The damage to the vehicle may be covered by your insurance policy, especially if a natural disaster caused it.
Depending on your insurance policy, you may not be required to pay for any repairs or may only be required to pay for a portion of them. All you have to do is call your insurance company to file a claim.
Extra Layer Of Protection
Staying safe on the road is not always enough; it depends on whether you have the right car insurance coverage. If an accident occurs, you want to be confident that you have adequate coverage to deal with any property damage or bodily injury charges that may emerge.
Cost-efficient
You will have to pay for car repairs and medical expenses out of pocket if something goes wrong with you or your automobile. This may cause you emotional distress in addition to financial strain. Consider automobile insurance as an investment in your safety rather than a cost from which you would profit.
What Is Full Coverage Auto Insurance?
This is likely the most perplexing topic when it comes to auto insurance. Many people appear to be unaware of what they are purchasing. Before signing off on any car insurance policy, it's important to differentiate comprehensive coverage from collision coverage.
Comprehensive Coverage
This policy covers theft and damage from events other than collisions, including fire, flood, vandalism, hail, falling rocks or trees, or colliding with a deer.
Collision Coverage
Collision coverage reimburses you for damage to your automobile caused by a collision with another vehicle or object (e.g., trees, guardrails, etc.). It also covers damage caused by potholes or rolling your vehicle.
Comprehensive and collision coverage are two types of extra insurance that protect your vehicle. Basic types of coverage that’s typically required of any auto insurance policy include:
- Liability insurance is required by law since it covers the costs of injuries, death, or damage to another vehicle or property caused by you or another driver while operating your vehicle. When you are at fault in a vehicle accident, liability coverage compensates for injuries to other people and damage to other people's property.
- Medical Payments Coverage provides for medical bills (up to a dollar limit) for you and your passengers who are wounded in a vehicle accident, regardless of who is at fault. You may not need this coverage if you and your passengers have health insurance.
- Personal Injury Protection Coverage covers medical and rehabilitation fees, replacement services, and burial expenses. It also compensates you for lost wages if you are wounded in a car accident and unable to work. Whether this is automatically part of your auto insurance policy will depend on your state, as each state has different auto insurance requirements.
- Uninsured/Underinsured Motorist Coverage will take care of you if you receive injuries from a vehicle accident. It also protects you if you are involved in a hit-and-run collision. However, this is only automatically part of your coverage if your state requires it.
Frequently Asked Questions About Car Insurance
If you're still on the fence about which insurance to get for your car, here are some questions people look up before making their final decision.
Is car insurance cheaper for older cars?
In general, if the used automobile is less expensive to fix or replace, auto insurance for older cars may be less expensive than insurance for newer vehicles of the same make and model. A car's value depreciates with time, lowering the maximum amount an insurance company is required to pay in the case of an accident.
Is car insurance in the U.S. expensive?
On average, car insurance costs $1,070.47 per year — but actual rates can vary based on a number of factors. Aside from the provider, the cost of car insurance depends on factors personal to you, such as your age, location, gender and even credit score.
What is the most basic type of vehicle insurance?
Liability and personal property insurance are the most basic parts of any auto insurance policy. Liability insurance covers any medical costs incurred by those you injure as a driver, while personal property insurance covers any damages made to someone’s property.
Finding the right car insurance is not something to brush over. It's not always the easiest on your pocket strings, and at Stampede Insurance, we understand the struggle of being a responsible car owner.
To get a quote on car insurance in your area, reach out to Stampede Insurance today!
