The average drive faces around three accidents in their lifetime even if they drive as carefully and defensively as possible. Even if you are a good driver, you may face an accident and have to file a claim. This is in part due to other people on the road rather than your own driving. This is why auto insurance is crucial and required in U.S. states.
If you are new to driving or purchasing your own car insurance policy, you should be aware of how much insurance is required by your state. Auto insurance requirements vary per state.
In Virginia, for example, all drivers must carry at least:
- $25,000 in bodily injury liability per person
- $50,000 in bodily injury liability per accident
- $20,000 in property damage liability
This is only the amount you need in order to drive legally and does not represent how much insurance is recommended. Driving without insurance can lead to fines, license suspension and raised insurance rates.
What Does Auto Insurance Cover?
Before an accident ever occurs, be sure to check your insurance policy and make sure that you have the right coverage. It is generally recommended that you carry full coverage auto insurance, which is the highest amount of insurance you can carry on a single vehicle.
This typically includes coverage such as:
- Comprehensive Coverage: Comprehensive coverage provides compensation for damages to your vehicle caused by fire, wind, hail, lightning, smoke, theft, vandalism and other incidents not involving collision.
- Collision Coverage: Collision coverage provides compensation for damages to your vehicle caused by a collision.
- Liability: Liability insurance covers bodily injury and property damage you may cause someone else while operating your vehicle.
- Medical Payments Coverage: Medical payments coverage provides compensation for medical bills you and your passengers may face after an accident, no matter who caused the accident.
- Uninsured/Underinsured Motorist: This insurance covers damages incurred in an accident involving another driver who is not carrying insurance.
- Roadside Assistance: Roadside assistance covers trip interruption expenses such as running out of gas or losing a tire.
In an accident caused by someone else, you will typically use collision coverage and medical payments coverage. Depending on your insurer and location, you may have other policy options available, so be sure to compare quotes between multiple insurers and ask any questions you may have.
How a Car Insurance Claim Works
Purchasing an auto insurance policy generally means paying monthly premium in return for coverage. As long as the policy is active, you can file a claim and receive compensation for damages to your vehicle. Filing a claim can be as simple as calling up your insurance agent.
You must explain the accident and provide certain information in order to file a claim. This includes the amount of damages to the vehicle, if any injuries are involved, where and when the accident occurred, etc.
When you file a claim, you must first meet your deductible. A car insurance deductible is how much you must pay out of pocket before receiving compensation. For example, say your car insurance deductible is $500 and your vehicle suffers $2,000 in damages. You must pay $500 toward repairs before you can receive compensation for the remaining $1,500.
How Much is Auto Insurance?
The cost of auto insurance varies depending on a variety of factors such as your:
- Coverage limits
- Driving record
- Credit score
- Value of the vehicle
It is best to compare quotes between multiple insurers in order to find the best price in your area for your vehicle. Contrary to popular belief, comparing quotes will not lower your credit score. In fact, it typically won’t affect your credit score at all. It is recommended that you check car insurance rates in your area before purchasing auto insurance or if you are unhappy with your current auto insurance rates. Checking quotes can help you understand the average cost of auto insurance and find the best policy at the best price.
Do I Qualify for Auto Insurance Discounts?
Auto insurance discounts are ways you can save money offered by your insurance provider. There are several different discounts available that you should ask your insurance agent about. Common auto insurance discounts include:
- Mature Driver Discounts are often available for drivers who complete a recommended driving course.
- Good Student Discounts are available for drivers who are currently students. This discount is available for those who make above a certain grade average, which can vary by insurer.
- Bundling Home and Auto Discounts refer to if you bundle home and auto insurance with the same insurer. This can also work if you bundle your auto insurance with your renters insurance.
When in doubt, shop around and speak with an insurance agent to get all of your auto insurance questions answered.
Also Read: How Does Car Insurance Work When I File A Claim?
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