We break down the auto insurance facts. Get facts on all vehicle insurance types including car insurance for a complete overview of what you need to know.
For all those too-long-didn’t-read folks out there, we have provided a summary of all of the facts you need to know about car insurance and other types of vehicle insurance:
- Vehicle insurance (also called auto insurance or motor insurance) is any coverage policy taken out to cover the potential expenses of owning and operating an automobile.
- Car insurance is a type of vehicle insurance, but vehicle insurance also refers to any road vehicle. Most auto insurance information on this page refers to coverage for all road vehicle types like motorcycles, trucks, and more.
- In return for your coverage, you pay a premium (a periodic fee) to the insurance company. Usually you pay this every month.
- When you have an expense that’s covered by your auto coverage policy, you file a claim with your insurance agency. After you file a claim, they make a settlement offer – the dollar amount of the expense they will cover.
- If you are unhappy with the settlement, you have a variety of options for disputing your company’s settlement offer; these include speaking with your claims adjustor and his or her supervisor, getting an independent appraisal from a third party, mediation, arbitration, and taking the company to court.
- Most insurance policies have an excess payment (AKA a deductible). This is a set dollar amount that you have to pay every time your insurance policy pays for a repair or other service.
- Car insurance can cover a wide variety of expenses. Some common ones include: medical expenses for bodily injuries to others on the road for which you’re at fault, repair costs for collision-related property damage for which you’re at fault, medical expenses if you or your passengers are injured on the road, costs of theft, vandalism, and acts of god, costs of repairing your vehicle if it’s damaged by a collision, and more.
- Some vehicle types cost more than others. Honda Civics and Accords are some of the most stolen cars so they can cost more to insure. High-end cars can cost more due to their high value and the cost of insuring an automobile can even differ by color.
- There are many types of auto coverage policies, each of which covers a different set of expenses. Which types of vehicle insurance you should get depends on your personal and family needs and finances.
- Some common types of auto coverage include: liability insurance, collision coverage, comprehensive coverage, uninsured motorist coverage, underinsured motorist coverage, auto repair coverage, roadside assistance, and more.
- No matter what, there is a car insurance policy for you. This might be in the private market, the residual market, or in the nonstandard auto coverage market.
- Every state requires some type of minimum vehicle insurance, but each state specifies the details of what qualifies and acceptable minimum auto coverage.
- Almost every state requires you to have liability insurance. Liability insurance is coverage for Bodily Injury (BI) and Property Damage (PD) to others on the road for which you are at fault.
- Some states (called the no-fault states) require you to have Personal Injury Protection (PIP) – insurance to cover your own medical costs auto-related medical expenses, regardless of who is at fault for on-road incident.
- Many other states require you to have Uninsured (and possibly Underinsured) Motorist Coverage – protection against financial damages done to you by other motorists whose insurance (or lack thereof) fails to cover your expenses.
- Be sure to fully understand what auto insurance your state expects you to have! If you drive without the proper car insurance, you could face a variety of consequences including owing fines, losing your license, losing your car’s registration, or even jail time.
- Many car insurance companies advertise “full” coverage. This is a misnomer. Full coverage generally only includes comprehensive and collision coverages. There are many other types of coverage that aren’t covered in such policies.
- There are a wide variety of factors that affect the price of your car insurance premiums and deductibles. Some of the most important ones include: characteristics of the car, intended use of the car, and characteristics of the insured drivers, such as age, sex, marriage status, collision history, moving violation history, and credit rating.
- The more financial risk you pose to the insurance company (the more money they expect to have to spend on covering your expenses), the higher your premium will be.
- While there is a minimum excess payment (deductible) on any given policy, you can often significantly decrease your premium by agreeing to take on a larger deductible.
- If you have a hard time getting car insurance because of the special type of car you own or because you have a history of recent and frequent moving violations or collisions, you may be able to get insurance either through the residual market (set up by the state) or from insurers on the private non-standard auto insurance market who specialize in providing coverage to drivers in your situation.
- Finding the best car insurance policy for you is complicated! Let us help out! Our step-by-step guide to buying auto coverage will walk you through all of the steps; from figuring out what kind of coverage you need, to finding the best deals available.
On this page, our goal is to provide you with all of the information you need to know about car insurance!