Car insurance can be confusing even to older and experienced drivers. There are a lot of factors that affect your car insurance and trying to sort through thousands of insurance agencies and policies can be overwhelming.
Before you go shopping for car insurance, it’s important to understand the coverage you need and how much you should be paying.
What Car Insurance Do I Need?
Each state has different laws regarding car insurance. Most states have a minimum requirement of liability insurance Liability insurance covers other drivers and passengers in case you cause an accident. Check with your state about their minimum requirements. Insurance agencies must offer this minimum liability requirement.
To purchase license plates or decals, you must certify that the vehicle is covered by the minimum insurance requirements or pay the Uninsured Motor Vehicle Fee. Insurance requirements also apply to antique motor vehicles. Your insurance carrier must be authorized to conduct business in Virginia.
Virginia requires the following minimum liability coverage:
- Bodily injury/death of one person $25,000
- Bodily injury/death of two or more persons $50,000
Property damage $20,000
Bodily injury liability helps with the medical expenses of the other driver and their passengers if you cause an accident. Property damage compensates for damage to others’ property while you’re operating the insured vehicle. Liability insurance can also help you with legal expenses, should a victim of an at-fault accident decide to sue.
Liability insurance doesn’t cover everything, however. You want enough coverage to protect yourself, your passengers and your vehicle in case of an accident. A lot of people throw around the term “full coverage.” Full coverage is actually relative. It’s a blanket term for the largest amount of insurance you can have on your vehicle. Most full coverage policies have liability insurance as well as:
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Comprehensive Coverage: Comprehensive coverage provides compensation for damages done to your vehicle through incidents not involving collision. This includes damage by fire, wind, hail, theft and vandalism.
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Collision Coverage: Collision coverage provides compensation if your vehicle is damaged due to a collision with another vehicle or object.
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Personal Injury Protection: Personal injury protection (PIP) provides compensation for your and your passengers’ medical bills after an accident.
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Uninsured/Underinsured Motorist Coverage: This coverage steps in if you have an accident involving a driver who isn’t carrying insurance.
Why Is My Car Insurance So Expensive?
The cost of your car insurance premiums are heavily influenced by your age. Younger drivers are considered at higher risk of filing a claim by insurance companies, thus agencies charge more to cover the risk. Car insurance generally drops once you turn 25, but there are other influences on your car rate:
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Value of the vehicle
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Credit score
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Driving record
These factors are all considered as an example of your risk. Insurance companies do not want you to file an insurance claim, since that means they have to pay compensation. Younger drivers tend to have more wrecks than mature drivers while males behave in aggressive driving activity more frequently than women.
How Much Should I Pay for Car Insurance?
Make sure to shop around your area. For a 16-year-old, the average car insurance premium is around $6,276 a year (around $523 a month). Meanwhile, a driver 18 years of age pays an average of around $4,625 a year (around $385 a month). In your twenties, the annual average receives a drastic drop to about $1,902.
Some insurance agencies specialize in nonstandard and high-risk drivers while others avoid insuring such drivers.
How Do I File a Car Insurance Claim?
If you have a car insurance policy and need to file a claim, make sure to call your agent 48-72 hours after the accident. Once you file a claim, the agency will investigate your claim.