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Car Insurance Explained – 101 | Everything you NEED to know!

At a minimum, most states require drivers to maintain liability coverage to help pay for medical expenses and property damage if they cause an accident. Some states require other types of coverage as well. And if you have an auto loan or lease, your lender will typically require specific types of insurance coverage.

A single auto accident can lead to thousands of dollars in medical bills and property damage. Having adequate car insurance coverage can help protect you from a financial loss after an accident or other covered damage.

How To Get Car Insurance Faq

To get car insurance for the first time, drivers need to decide what coverage they need, gather their personal and vehicle information, and shop around for the best policy at the lowest price. A first-time driver should expect to pay up to 300% more for coverage than someone with more experience. But with research and a little bit of searching, first-time drivers can still find a policy that fits their budget.

How To Get Car Insurance for the First Time: 5 Tips

1. Determine what type of coverage you want to purchase.

Almost every state requires drivers to carry liability insurance, which covers property damage and injuries to other drivers in accidents that you cause. Some states also require other types of coverage, like uninsured motorist and personal injury protection. Plus, you should consider purchasing extra coverage to protect yourself in more situations.

2. Gather your personal and vehicle information.

To get car insurance quotes and ultimately purchase a policy, you will need to provide personal information such as your driver’s license number, date of birth, address, occupation, driving history and insurance history. You will also need to have your vehicle registration number and vehicle identification number .

3. Get at least three quotes from different insurance companies.

Every insurance company has its own way of calculating premiums, so getting multiple quotes increases your chances of finding the best deal possible.

4. Pick a company

5. Get insured

What If I Dont Carry Car Insurance

In nearly every state in the country, you need to buy auto insurance to avoid breaking the law. If you get caught without it, you could be subject to fines. Depending on where you live, the state may suspend your license and/or registration or impound your vehicle. And youll have to pay to get them back.

If youre in an accident while driving without insurance, you may have to pay for accident-related expenses out of pocket. If you try to purchase a policy after being uninsured, your rates will likely be higher than someone whos maintained continuous coverage.

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When Do I Not Need Car Insurance

Although it is advised your vehicle to be insured in all cases, there are times when you are not legally required to have coverage.

Here are some reasons you may not need to have auto insurance for your car.

  • Statutory Off Road Notification: A valid certificate from SORN allows you to legally be uninsured if you are not driving your vehicle.
  • Your Car Is Off The Road: Your car can legally be uninsured if it has been kept off your stateâs roads from the 1st of February 1998
  • Your Car Is Unable To Drive: If your car is totaled and you are not able to drive it, you do not have to have insurance. This is provided that you have given sufficient notice.
  • Your Car Is With A Dealer: If you are in the middle of purchasing your car, and it is held in stock or is in between dealers, then you do not need to be insured.

How Much Medical Payments Coverage Do I Need

How Much Car Insurance Do I Need?

What does it cover? Medical payments coverage, or MedPay, typically covers medical expenses you or your passengers receive after a car accident, even if youre riding in someone elses car.

Is it required? MedPay is required in just two states: Maine and New Hampshire .

How much MedPay coverage should I have? Coverage limits typically start at $1,000 per person and max out at $10,000 per person. If you have health insurance, it might be worth getting enough coverage to pay for your health plans deductible. If you and your passengers dont have health insurance, you should consider a higher limit or maxing out your coverage.

Important note: Personal injury protection also provides coverage for medical expenses, in addition to lost wages and funeral expenses. If you have a choice between PIP and MedPay, PIP is almost always a better choice due to its expanded coverages.

Example:

Caitlyn and Chris are in an accident while riding as passengers in their friend Teds car. Everyone is OK, but Chris and Caitlyn get checked out at the hospital just to be on the safe side. Chris gets a $750 X-ray, while Caitlyn gets a $1,000 CT scan. Fortunately, they have MedPay coverage up to $2,000 per person, so their auto insurance pays for both of their bills.

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Whats The Minimum Auto Insurance I Need

It depends where you live. Nearly every state requires liability insurance, but minimum coverage amounts vary by state. Some states also require drivers to carry uninsured/underinsured motorist coverage and personal injury protection or medical payments coverage. The minimum limits for these coverages vary by the state where you reside.

If you have an auto loan or lease, your lender will probably require you to have collision and comprehensive coverage as a condition of your financing.

What Car Insurance Do I Need

The most confusing thing about car insurance is that it isn’t a single type of coverage that you get and never think about again. There are several types of coverage available, and it’s important that you understand what they are and what they will cover to ensure you get the right amount of coverage for you and your property.

If you own a vehicle, you might be asking yourself “What car insurance do I need?” The most confusing thing about car insurance is that it isn’t a single type of coverage that you get and never think about again. There are several types of coverage available, and it’s important that you understand what they are and what they will cover to ensure you get the right amount of coverage for you and your property. Each type of coverage serves a purpose in regards to what it pays for if your vehicle is damaged or you sustain injuries in an accident.

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What Auto Insurance Do I Need To Buy

Car insurance can help pay for medical bills, vehicle repairs, and other expenses you might incur if youre in an accident or cant drive your car due to a covered incident. You can choose to include different types of coverage in your policy. The kind of auto insurance you need to buy depends on how much protection you want.

Why Does Car Insurance Go Up After A Claim

How Much Car Insurance Do I Actually Need?

The size of your car insurance premium increase will depend on whether or not you were at fault. If the accident was not your fault, the price hike will be much smaller than if you were to blame.

Your premium increase will also depend on other factors such as whether youve made a claim on your insurance before, the cause and severity of the accident, and your overall driving history. However, youll usually be looking at an increase of between 20%-50%.

You will also generally lose any no-claims discount you have built up, unless you have protected this. Be aware, however, that even if its protected you could still see your premiumsrise. This is because a no-claims discount is a reduction from a baseline car insurance premium. Having an accident could increase this baseline charge, meaning – even though the size of the discount is the same – you will see higher premiums overall as a result.

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Liability Coverage Vs Car Value And Assets

When it comes to car insurance, there are two major types of coverage: liability, which covers damage you may do to someone else and their property, and everything else, which covers damage that happens to your property.

Liability-only car insurance is cheaper and is a coverage requirement in almost every state, with each state mandating its own minimum coverage levels. While choosing the minimum required levels of coverage is the cheapest option, it isnt the smartest one. Some states have low liability minimums, with California and Pennsylvania requiring as little as $5,000 for property damage coverage.

The smartest thing for drivers is to increase their liability levels as high as they can reasonably afford to go. If you are at fault in an accident and injure someone else or damage their property, you will be held liable for their expenses. Drivers without enough liability coverage to pay those costs will still be held responsible. The courts can seize your assets and garnish your wages to pay for damage youve caused, so having the highest possible liability coverage levels is the best way to protect yourself.

What Is Car Insurance

Car Insurance is a legal requirement. As a responsible driver you will no doubt be aware that having insurance for your vehicle is mandatory, but, due to the terminology used by insurers, you may not have a complete understanding as to what exactly it is and why you need it. From the kind of car you own, your driving history to your budget, there are a number of factors you have to take into consideration before you purchase your policy. With this car insurance guide well walk you through all you need to know to help you gain a clearer understanding of what car insurance is, and how you can get the best policy for you.

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Can I Get Car Insurance Instantly

Yes! If you need car insurance quickly, you can generally call or go online to get a quote and have coverage for your car all in one day. For example, if you’ve just purchased a new car at a dealership and need coverage in order to drive it off the lot, you can get the policy you need almost immediately.

The most convenient way to buy insurance and put it into effect on the same day is often to buy it online.

Larger insurance companies, like State Farm, Progressive and Geico, are more likely to offer same-day insurance than smaller or more specialized insurers. Smaller insurance companies typically require you to call one of their agents or go into an office to secure a policy.

Can I Buy A Car And New Car Insurance On The Same Day

Car Insurance Quotes Online: Why do you need a car insurance?

You can typically buy car insurance and a new vehicle on the same day. In fact, you can often buy a new car insurance policy in less than an hour. Once you submit your payment, you can usually download a proof of insurance card on your mobile device or print out.

But if you want to find good coverage at a reasonable price, we recommend doing your research and shopping around ahead of time. Heres more on how to buy car insurance in five easy steps.

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How Do I Know What Types Of Car Insurance Coverage I Need

To determine what insurance coverage you need, you’ll need to consider factors like your driving history, where you live, and what your state requires for basic coverage. If you lease or finance your vehicle, you also might be required by your lender to carry more coverage, like collision and comprehensive. Learn more about our car insurance coverages.

Driver Negligence Or Recklessness

Quite a few times, cyclists are hit by a car simply because the driver wasnt paying attention or driving recklessly. While some encounters may involve a driver behaving aggressively toward bicycle riders, it may be a driver moving into the bike lane or opening a car door without ensuring there is no one else around.

When a driver acts recklessly or negligently, they are often deemed at fault for any injuries or damage that occurs, and their insurance will likely pay resulting expenses. Depending on the seriousness of the situation, the driver could face hundreds of dollars in fines or jail time.

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How Much Collision Coverage Do I Need

Collision coverage pays for repairs to your own vehicle after an accident, no matter who caused the accident. Its not required by law in any states, but if youre leasing or financing your vehicle, you may be required to have it. Collision coverage also requires you to pay a deductible before it will cover a loss. Typical deductible amounts are $500 or $1,000.

Collision coverage will pay to repair or replace your car up to its actual cash value, so youll get as much coverage as your car is worth. Your deductible amount will determine how much youll pay for coverage each month the higher your deductible, the lower your monthly payments will be, and the lower your deductible, the more youll have to pay for insurance per month.

Online Banks And Online Credit Unions

How Much Car Insurance Do You Need | 4 EASY STEPS

What online banks and credit unions lack in branches, they make up for with few, if any, fees and high annual percentage yields, or APYs. These institutions are typically insured by the Federal Deposit Insurance Corp., or by the National Credit Union Administration if they’re credit unions. They are also invested in internet security. Your money is just as safe at an online institution as it is in a traditional bank or credit union.

For more information, check out the following reviews of online banks and credit unions:

» Want your cash to grow faster? Check out NerdWallets best high-yield online savings accounts

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Should I Get Rental Car Insurance

So, should you get rental car insurance? It depends if you want peace of mind that youll be covered in a worst-case scenario. If you want coverage, opt for the rental agencys collision damage or loss damage waiver if you dont already have full coverage insurance.

One study in the Journal of Advanced Transportation found that inattention, poor driving, poor handling and aggressive driving are all associated more with rental cars than non-rental cars. You might be a great driver on your regular commute, but it can be stressful driving in a new situation.

It Lets You Make Your Claim Settlements Hassle

Vehicle insurance comparison through Insurancey allows you to ease your claim settlements. With the help of this excellent website, you can evaluate the many cashless garages connected to the insurance provider and choose the one with the best infrastructure of garages.

To increase your chances of a successful claim settlement, you can also compare the claim settlement ratios of several insurers and choose the proper automobile insurance with a higher percentage.

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If You Have A Car Loan:

If you have a loan, you usually need to insure your car. If you do not buy insurance, the loan company may buy it and charge you. It usually costs less if you get your own Collision and Comprehensive coverage.

Auto insurance does not pay off your loan if your car is damaged and its market value is less than what you owe. Auto dealers and lenders may offer Guaranteed Auto Protection insurance for this purpose.

Liability Coverage is for accidents that are your fault.

  • Bodily injury liability pays for bodily injury you cause someone else.
  • Property damage liability pays for property damage you cause someone else.

California law requires you to have this coverage. See pages 67.

Uninsured/Underinsured Motorist Coverage is for accidents when the other driver is at fault and does not have insurance or does not have enough insurance.

  • Bodily injury coverage pays medical expenses for you and passengers.
  • Property damage coverage pays the cost of repairs to your car not covered by collision coverage up to $3,500. You may not need this if you have collision coverage.

You must be offered this coverage, but you can choose not to buy it.

Medical Payments Coverage pays limited medical expenses for people injured in the car you are driving when you have an accident, whether or not you are at fault.

You may be offered this coverage

Physical Damage Coverage pays the cost of repairs or replacement of your car, minus your deductible.

This coverage is required by lenders or leasing companies.

Talk To The Department Of Insurance

How Much Car Insurance Should you need to Buy?

We are the state agency that regulates the insurance industry. We also work to protect the rights of insurance consumers.

Contact the California Department of Insurance :

  • If you feel that an insurance agent, broker, or company has treated you unfairly.
  • If you have questions or concerns about insurance.
  • If you want to order CDI brochures.
  • If you want to file a request for assistance against your agent, broker, or insurance company.
  • If you are having difficulty opening a claim with your insurance company.
  • To check the license of an agent, broker, or insurance company.

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Paperwork From Your Insurance Carrier

Insurance companies not only request paperwork from you. They also send it to you. You will need to hold on to these important pieces of information:

  • Car insurance policy: Your policy provides you with all of the information about your coverage. Car insurance policies can be lengthy. But make sure you take the time to read and understand yours fully.
  • : The dec page has all of your information listed in an easier-to-read format. This should be your go-to paper when you have questions about your coverage or the cost.
  • Proof of insurance: Keep your proof of insurance in a safe place within the car. You will need to show it if you are pulled over for any reason or are involved in an accident.

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