When it comes to handling anything car insurance related, you might be tempted to back away slowly with no sudden movements – car insurance follows the same logic as snakes, right? It’s an understandable reaction. Auto insurance can get, well, complicated, and there are plenty of things to remember. We’ll go over ten things that you need to know about car insurance – without making it complicated.
10 things you need to know about car insurance.
1. Liability insurance won’t pay to repair or replace your car.
This is an important thing to know about car insurance:
Liability insurance will only cover your legal obligation to the other driver and their passengers if you’re at-fault in a car accident. It can cover expenses such as the other driver’s medical bills, their lost wages, and their pain and suffering. (And it can help cover legal expenses if they decide to sue.) Liability insurance can also cover the costs of repairing or replacing the other driver’s car and other property you might damage.
But it won’t cover repairs or replacement to your car.
In order for your own vehicle to be covered, you would need collision and comprehensive coverage. To give a brief rundown, collision coverage can help repair or replace your car if you’re at-fault in an accident or otherwise collide with something. Comprehensive coverage can help you repair or replace your car if it’s damaged by something other than an accident, such as an animal strike, vandalism, fire, theft, and falling objects (i.e. trees.)
2. Your deductible can affect your rates.
Your deductible is the amount that you agree to pay towards a claim if you have a loss. Basically, you have your piece of the claim and the insurance company has theirs. (Although the insurance company’s piece will probably be quite a bit bigger.) For example, if you have a $500 deductible and then you have a claim that totals $1,500, you would pay $500 and your insurance company would pay $1,000.
Something to note about car insurance rates – your deductible can affect your premium. If you choose a higher deductible, your premium could be lower because you’re less likely to file a claim. So, if you’re financially comfortable with raising your deductible, you could see lower auto insurance rates. But it’s a balancing act – you don’t want to raise your deductible so high that it would clean you out if you had to pay it.
3. Bundling can help you save money.
Bundling means that you’re getting multiple lines of coverage (types of insurance) from the same insurance company. If you bundle your home and auto insurance, your insurance company might offer you a discounted rate. So, you might stand to save some cash on your insurance if you get auto insurance and home insurance from the same carrier.
4. Red cars do not cost more to insure.
There’s a common myth about insuring red cars – namely that they cost more to insure than cars of other colors because the type of person who drives a red car is more likely to be a risk-taker (and thus more likely to gather a collection of speeding and traffic tickets.) Well, we hate to burst your bubble, but this isn’t exactly true. Insurance companies don’t care what color paint the car has – they’re more concerned with how safe the vehicle is, your driving record, stuff like that.
So, sorry – or not sorry – for debunking one of the most common myths about car insurance out there!
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5. The Good Student Discount can help you save money if you’re insuring a teen driver.
You’ve probably heard (or experienced) that insuring a teenaged driver can be very expensive. As the parent/ATM of a teenager, you’re probably wondering how to get good, solid car insurance for your kid while also saving money.
One way you can save money on teen car insurance is to take advantage of the Good Student Discount. If your teenager (or young adult) makes good grades in high school or college, your insurance company might offer you a discount. So, don’t despair if you have to insure a teenaged driver – this discount can help offset the higher cost of getting coverage for a new driver.
6. The state minimum level of car insurance might not be enough.
Each state requires you to have car insurance to protect other drivers on the road. However, the state minimum level of insurance might not be very high. And as a result, it might not be enough to cover all the expenses of a serious accident – and the potential resulting lawsuit. So, when you’re getting car insurance, you might want to get higher limits of coverage than what your state says you have to have. It’s important to make sure that you’re financially protected.
7. It’s illegal to drive without the proper car insurance.
This is another important thing to know about car insurance, and it’s pretty self-explanatory. Driving without the proper car insurance is not legal – that’s that. (This is why it’s so important to make sure that you don’t let your car insurance lapse.) You can get in major trouble if you drive without insurance. You need to make sure you fulfill your state’s requirements for auto insurance.
8. If your car insurance is non-renewed, that’s not the same as being canceled.
If your car insurance is nonrenewed, that’s not the same thing as being canceled. Being nonrenewed just means that your insurance company has decided not to renew your policy when it expires. (This could be because they’re not writing that line of coverage in your area anymore or because you’ve filed a lot of claims.) Getting new car insurance after being nonrenewed is usually not too big a deal.
However, being canceled means that your insurance company has decided to end your coverage in the middle of the policy period. This could be because of nonpayment of the premium, misrepresentation on the application, or fraud. And this might make it a little trickier to find new car insurance because other insurers will see you as being more of a risk.
Anyways, though both result in you having to find new insurance, car insurance nonrenewal is not the same as a cancelation.
9. Speeding tickets can affect your car insurance rates.
Yes, speeding tickets can affect your car insurance rates and may cause your rates to go up. That’s because your driving record can be a big deal to your car insurance rates. Speeding tickets can show that you’re a risky driver.
10. Getting multiple car insurance quotes can help you save on your rates.
And here’s another important thing to remember about car insurance: if you get multiple quotes, you could save on your insurance. It’s important to check out different carriers when you’re getting car insurance.
We can help you with that. Our agents can help you get the coverage you need to protect yourself financially when you hit the road. We enjoy making insurance easy. If you’d like to get quotes, you can fill out our online quote form or give us a call – whichever you’d prefer.