| Auto Insurance Basics/ information |
What Is Auto Insurance?
An auto insurance policy is a contract between you and an insurance company. You pay a premium. In exchange, the insurance company promises to pay for specific car-related financial losses that you may have during the term of the agreement.
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Do You Need It?
Auto insurance is a legal requirement in most states. State laws typically say that as a driver, you either must have insurance, or be able to provide evidence that you have the financial resources to pay the penalty in case you are responsible for causing damage or injury to another person or property. An insurance policy is the easiest way to document that you can pay damages if required. You also need auto insurance to protect yourself financially. If you or anyone for whom you're responsible seriously injures another person, you can be held liable for the injured person's medical expenses, rehabilitative therapy, long term nursing care, as well as for his or her loss.
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Who Is Covered?
Your policy covers you, your spouse, and other family members who live in your household and are entitled to drive one of your vehicles.
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What Is Covered?
Your policy covers injuries or damages you cause to someone else. Most state laws require that you carry a minimum amount of liability insurance, which pays for injuries or damages you cause to someone else. It's a good idea to carry much more than the minimum -- enough to protect all your assets. Once you've met the legal requirements, you should select other types and amounts of coverage that will tailor your policy to your own needs. Here's what an auto policy can cover; above and beyond your liability:
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Your car - Your automobiles as listed on the policy, and any additional vehicles you buy over the next year. |
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Your car against collisions - Your car is covered against collisions it may have with any other object, no matter who caused it. |
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Your car against damage from almost anything else - Vandalism, theft, broken glass, storms, and falling objects. |
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You, your passengers, and your car against uninsured or underinsured motorists - If you're hit by someone who either doesn't have insurance or doesn't have enough insurance to cover the accident, your loss is covered under your auto policy. |
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You and your passengers for medical injury payments - Reasonable medical (and funeral) expenses incurred as a result of injuries sustained in an accident. |
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| What Affects Your Rates? |
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Where you live - Where you live and drive your car has a significant impact on the cost of your insurance. This is because the frequency of things like vandalism and car theft and the cost of things like car repairs and medical bills vary enormously from one region to another. |
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The make and model of your car - The cost of insurance depends a great deal on what type of car you drive too. (It can be helpful to bear this in mind when choosing a car, especially if you're on a tight budget.) |
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Your driving record - Your insurance rates will be affected by any tickets you've received and violations of which you've been convicted over the past several years. |
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Your age - Statistically, younger drivers get into more accidents and tend to get more tickets. |
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Income - When insurance companies reimburse you for lost wages due to an automobile accident, some companies charge less if a person's income is below a certain level. |
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Vehicle use - Different people use their cars for different purposes. Some people drive to work, and others drive only for pleasure. The less you drive, the less you may be charged for insurance. |
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| Auto Insurance Basics |
| What Is Auto Insurance? |
Do You Need It? |
Who Is Covered? |
| What Is Covered? |
| What Affects Your Rates? |
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