Ten Commonly Asked Car Insurance Questions

Car insurance can be confusing, and you usually never have to think about it until you need it the most. There are many different types of coverage and even more providers, and to make things even more complicated, different states have different requirements for what types of coverage you must have to legally drive in that state.

Check out these 10 commonly asked car insurance questions:

1) Do I have to have car insurance?
If you want to drive legally, you have to have car insurance. If you do not carry insurance and a policeman pulls you over, you will face significant penalties.

2) How much car insurance am I required to have?
The amount of car insurance coverage required differs state by state. However, all the state is concerned about is liability coverage. This means that the state wants to make sure that if you injure someone else, you will be able to pay for the damage through insurance. However, liability coverage alone will not pay for your own vehicle’s repairs.

3) What is a deductible?
If you have a deductible, this means that you will have to pay the stated amount when you suffer an at-fault loss. For instance, if you back into a tree in your yard and do $2000 worth of damage to your vehicle and have a $500 deductible, all the insurance would pay is $1500.

4) Does my credit rating influence my car insurance rates?
Your credit rating actually can influence your car insurance rates. Those with lower credit scores or short credit histories usually pay more for car insurance than those people with better credit ratings.

5) How can I save money on car insurance?
There are many ways to save money on car insurance. Drive safely, don’t get any traffic violations, pay your bills on time, and wear your seat belt. Bundling multiple vehicles or purchasing renters’ or homeowners’ policies from the same company that writes your car insurance is another way to save money.

6) Will I have to pay more for insurance if I am young?
Age does play a significant role in insurance premiums, as does gender. Males under 25 pay the highest insurance premium, while married females pay lower rates. Insurance companies have lots of statistical data backing up who poses a “higher risk” and can answer your questions more specifically.

7) What’s the difference between comprehensive coverage and collision coverage?
Comprehensive covers your vehicles from “Acts of God” and theft. Acts of God would be considered tree limbs falling on your car or a deer jumping in front of your car, just to name a few. Collision covers your car in the event your car is involved in an accident with another vehicle, your fault or someone else’s, including hit and runs. Neither coverage is required by law, but may be required by the bank that holds your car note. (Especially if you are leasing or have financing through the dealer)

8) What’s the difference between Bodily Injury coverage and Medpay?
Bodily Injury coverage covers those you injure with your vehicle. Medpay covers you in the event you are injured in a car accident.

9) What car insurance coverage should I get?
You should get at the least the state minimum. If you have a newer car, you need comprehensive and collision coverage.  Towing Coverage, Rental Coverage, OEM Endorsements (New vs. Used Parts), Medpay, and Roadside Assistance are all options to consider and do not always come with “Full Coverage” policies. Be sure to read your policy thoroughly and be sure to be specific about the coverage you want. Some car insurance companies also offer disability insurance in the event you can’t work due to injuries sustained in an accident.

10) Do I need more than the state minimum coverage?
If you have significant assets, strongly consider getting much more liability coverage than is required by the state. If you injure someone and your insurance is not enough to cover their injuries, they can sue you for the difference.

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