It seems odd to purchase a product you hope you’ll never use, but that’s exactly what insurance is. There are several different kinds of insurance. Broadly speaking, they include life insurance, health insurance, homeowners, renters insurance and car insurance. Car insurance, with all the features, optional coverages and adjustable limits you can set, can be very expensive.
But you have to have liability car insurance. That’s the law in every state. What does liability car insurance cover? If you are the driver at fault in a car accident, your insurance will pay for the damages sustained to the other vehicle and for any accident-related injuries the other driver and any of their passengers bore at the time of the crash. In the long run this helps protect you against getting sued. Here is a fresh resource on car accident statistics.
Required car insurance policies vary by state. For example, California requires drivers to carry liability insurance of $15,000 for injury/death to one person, $30,000 for injury/death of multiple people, and $5,000 for property damage. Texas on the other hand, only requires bodily injury liability, with its minimum legal requirement being $30,000 per person and $60,000 per accident. While not all insurance policies are required, it is recommended that you get more coverage than your state’s legal requirement.
Collision Insurance covers your own car if you are the motorist responsible for the traffic collision. Collision insurance is most valuable if you have a fairly new car. If your car isn’t worth much, such as a typical car that a teen might drive, look into what your policy will cover should your car get totaled in an accident.
Comprehensive insurance, unlike liability and collision insurance, covers not only accidents, but damages resulting from natural disasters, vandalism, or theft. But remember, if your car is not worth more than its damages, it will be totaled, and the payout is often much less than the asking price of a new or used car.
Depending on the state, even liability insurance coverage can be expensive. According to the Insurance Information Institute (III) as of 2012, 12.6 percent of drivers, or 1 in 8 motorists were uninsured with Oklahoma having the highest percentage rate of uninsured drivers, clocking in at 26 percent. Uninsured motorists make the gamble that they’ll never cause an accident. Too often, they lose that gamble. Therefore, insurance companies offer uninsured/underinsured drivers insurance to provide a cost-effective protection.
Other Low-Cost Options
When deciding on which car insurance policy to carry, you need to think about how often you use your car. Do you drive it every day, or only on the weekends? Is it stored in the garage, or parked on the street? It’s best to investigate user-based insurance. Most insurance companies offer policies based on your vehicle’s mileage, your average driving speed, and other measurable activities. User-based insurance is available in every state.
Of course, each auto insurance policy and how driving skills are measured varies state-to-state. California and a select few other states only allow your insurance company to track how many miles you drive, using a device that is attached to car to measure speed and road conditions. Other states allow insurers to track how fast you drive or how hard you brake. If you drive safely and carefully, providing this kind of data to your insurance company will get you better rates.
Deciding what car insurance policy to go with can be complicated, but with liability car insurance platforms like CoverHound that can generate competitive quotes quickly, finding adequate coverage should more than doable.