Car insurance gives you the protection you need in case of an accident. Most states require liability coverage, which helps pay for other people’s injuries and property damage if you are at fault in an accident.
Other coverages include comprehensive and collision, which help cover damage to your vehicle. Your premium is based on your coverage options, deductibles and driving history.
Coverage
There are many factors that go into determining your car insurance cost, such as the coverages and deductibles you choose. Your location, driving record and vehicle are also considered when calculating your rate. Other variables include marital status, gender and your credit-based insurance score (where permitted by law).
Adding optional co 수원운전연수 verage types like roadside assistance, gap coverage and rental reimbursement can make your policy more comprehensive. Medical payments coverage, or MedPay, can help cover accident-related medical expenses for you and your passengers regardless of who is at fault. Personal injury protection, or PIP, is required in some states and covers lost wages and other expenses after an a 수원운전연수 ccident if you are injured.
Each state has its own minimum requirement for car insurance, and you may need additional coverage if your lender or leasing company requires it. Liability insurance, which pays for another person’s injuries or property damage that you cause, is mandatory in most states. In addition to liability, most drivers choose to carry collision and comprehensive coverages for their own vehicles. These policies pay for damage caused by accidents, theft, vandalism, storms and other events.
Deductibles
Deductibles are an integral part of every car insurance policy. They are a way to control upfront costs and encourage responsible claim filing. In most cases, the higher the deductible, the lower the premium.
Some coverage types do not use deductibles, like liability, which covers damages to other people and their property caused by an accident you cause. However, collision and comprehensive coverage do usually have deductibles, which range from $100 to $1,000.
When a repair bill comes in, the insurance company will subtract the amount of the deductible from the total cost of the repairs. For example, if a mechanic estimates $2,500 in repairs and you have a $500 deductible, the insurance company will only pay $2,000.
The choice of a deductible amount is a balance between budget flexibility and psychological comfort. Choosing a high deductible will decrease your premium and out-of-pocket costs if you file a claim, but it may feel stressful to come up with the money if you are in an accident. Conversely, a low deductible will increase your premium but will require you to pay less out-of-pocket if you don’t file a claim.
Liability
Liability car insurance covers bodily injury and property damage expenses for other people that occur when you are at fault in an accident. It also typically pays legal fees and judgements if you are sued for the accident. It’s required in most states to have a car insurance policy.
Other coverage types, such as comprehensive and collision, can also be included in a vehicle insurance policy. These cover things like theft, natural disasters, acts of vandalism and damage from hitting an animal. Some companies even offer rental reimbursement coverage that will pay for a rental car while your vehicle is being repaired after an accident.
The specifics of how each type of coverage works and what’s covered differ by state. Some states also have different requirements for minimum coverage levels, and there may be optional coverages you can add on, such as medical payments and uninsured/underinsured motorist protection. Also, there are several factors that can impact your premium, including your driving record and how many miles you drive each year, your occupation, and whether you use your car for business or pleasure.
Collision
According to NerdWallet, collision coverage pays to repair or replace your vehicle if it’s damaged in a crash with another car or stationary object like a fence, street sign or building. It might also cover damage from a hit-and-run or if your vehicle rolls over. This type of coverage is typically an optional add-on, but your lender might require it if you’re leasing or financing your vehicle.
Typically, the maximum amount that a collision policy will pay is your car’s actual cash value minus your deductible. Generally, the more expensive your vehicle is, the higher the collision insurance premium will be.
Some companies offer a feature called disappearing deductibles that reduce your collision deductible by $100 each year you don’t have an accident or claim. However, this feature usually costs extra and may not be worth it for most drivers. Consider dropping collision coverage if your car is old and/or you have significant savings that you can use to pay for repairs if needed. However, if your car is new or you’re leasing or financing it, it’s probably smart to keep it.
Comprehensive
A comprehensive car insurance policy covers damage caused by non-collision events like natural disasters, theft and vandalism. If your car is stolen or damaged by a hurricane, tornado or flood, comprehensive coverage will pay to repair it, minus the deductible. It’s also important to have comprehensive if you live in an area at high risk for severe weather or crime.
In many cases, comprehensive is worth the price, but it depends on your car’s value and how much you can afford to pay for a deductible in the event of a claim. You can often save money by choosing a higher deductible, which will lower your monthly premium.
Some drivers choose not to get comprehensive auto insurance because it’s more expensive than collision. However, if you lease or have a loan on your vehicle, it’s likely that your lender or lessor will require comprehensive coverage in order to protect their investment. In these situations, you might want to consider gap insurance, which will cover the difference between the actual cash value of your car and the amount still owed on your loan or lease in the event of a total loss.