Car insurance is a contract between you and an auto insurer. You pay a premium, and in return, the insurer promises to reimburse you for certain expenses if your car is damaged or destroyed.
Most states require you to have liability coverage, but you should consider purchasing more than the minimum. You also need to decide whether you want collision and comprehensive coverages.
Car insurance provides a variety of coverage types to protect you and your vehicle. The type of coverage you choose, the limits you select and your deductible amount will all affect your policy cost.
Liability coverage protects you if another person files a claim against you for injuries or property damage caused by an accident you cause. It consists of bodily injury liability (BIL) and property damage liability (PDL). In most states, there are minimum limit requirements for this type of coverage. You may want to consider a higher limit, as the costs of medical bills and repairs can add up quickly.
Comprehensive coverage pays to repair or replace your car if it is damaged by something other than a collision, such as theft, vandalism, acts of nature, fire or glass damage. It may also cover damage from an animal-related incident, like hitting a deer. Many people purchase comprehensive and collision coverage together, but they are distinctly different.
Uninsured motorist coverage, which is often paired with underinsured motorist coverage, protects you and your passengers if you are injured by an uninsured driver or in an accident with a hit-and-run driver. It consists of uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD). You can usually purchase this coverage in addition to your other car insurance policies.
A car insurance deductible is the amount you are responsible for paying before the insurer starts to pay on a claim. It is an important part of any policy and should be considered carefully when shopping for a new one. A higher deductible generally results in lower premiums, while a lower deductible typically results in higher premiums.
When choosing a deductible, it is important to consider both your budget constraints and your tolerance for risk. A higher deductible may allow you to save money on your premium, but it will also require you to pay out of pocket more in the event of a claim.서울운전연수
Deductibles apply to both collision and comprehensive coverage, which covers damage caused by other events besides accidents with other vehicles or stationary objects. For example, if you hit a tree while driving on a rural road and your car is totaled, your comprehensive coverage will help pay to repair or replace the vehicle. However, you will be responsible for the first $500 of any claim, meaning you could be out a substantial sum of money in the event of a large accident.
Some companies offer a diminishing or vanishing deductible option that can reduce or eliminate your deductible over time if you remain claim-free. Be sure to ask about this when comparing quotes, as the exact details will vary by company and policy.
The limits provided by your car insurance set the maximum amount that the insurer will pay for a claim. Limits are different for each type of coverage and are usually listed on the policy declarations page. Car insurance policies typically include per-occurrence, per-person and aggregate limits.
The type and amount of limits you choose depend on your budget and personal risk tolerance. For example, if you have few assets that could be lost in an accident, you may want to consider lower limits to reduce your premium. But if you have a significant income, savings for retirement or college for your children and own an expensive vehicle, it’s important to ensure that your policy has high enough limits to protect you in the event of a major accident.
In general, you should have at least $50,000 in bodily injury and property damage coverage per person. This will help you cover medical, legal, funeral and lost wages if you are at fault for an accident that injures multiple people. It will also cover the cost of repairing or replacing another driver’s car (property damage) and their other expenses if your policy is deemed to be at fault in an accident (bodily injury).
You should consider purchasing uninsured/underinsured motorist coverage (UMBI and UMPD) as well, which helps pay for damages if you are injured by an uninsured or underinsured driver. In addition, UMBI and UMPD can often be paired together to provide more comprehensive protection for your car and family.
Most states require that drivers carry a minimum amount of car insurance to be legal on the road. The requirements vary by state but typically include liability coverage that pays for third-party bodily injury and property damage (BI/PD) if you cause an accident, plus medical coverage in the form of personal injury protection (PIP) or medical payments (MedPay). Collision and comprehensive coverage help pay to repair your vehicle if it’s damaged in an accident with another vehicle or stationary object. They are usually optional but might be required if your car is financed or leased.
In addition to state-mandated limits, there are a variety of other factors that can affect your rate and the type and amount of coverage you need. These include your driving record, especially any accidents and moving violations, your credit history and where you live since more populated areas can lead to higher rates of theft, vandalism and other losses.
Many insurers also offer a variety of discounts, such as safe-driving rewards and good student discounts. The type of vehicle you drive and its value can also impact your rate, as can the number of miles you put on your car each year. The deductible you choose and your policy term can affect the cost, too. For example, a larger deductible generally results in a lower premium.