Auto Insurance Basics

For all drivers out on the road, there is a general consensus when it comes to driving; it is very dangerous. There are an infinite amount of problems that may arise when you are driving. Things can even happen when you aren't driving. Sure, millions of people own cars and drive daily without a single problem, but by the same token there are probably just as many accidents, tragedies, and just plain bad luck occurrences that take place with people and their cars every single day. For that reason, we have auto insurance.

Auto insurance is available to protect you and your loved ones that travel with you from car crashes, vandalism, theft and natural disasters. Your vehicle is protected financially while the people are protected against injuries. If that reason alone is not enough to get an auto insurance policy, the next reason to purchase a policy will be. It's the law.

All 50 states require minimum coverage liability. Some states have additional requirements, check with the state you reside in to ensure that you at least meet the minimum. Another reason to get auto insurance, one that affects the majority of drivers, is the fact that most auto finance companies require not online insurance, but full coverage insurance, as long as your vehicle was purchased through a loan. Now that we have discussed the reasons for having an insurance policy, let's move on to the details of the bare minimum coverage, liability insurance.

Liability coverage, as previously mentioned, is the national minimum coverage in the United States. There are three different types of protection: property damage liability, bodily injury liability, and uninsured/underinsured motorist protection. Property damage and bodily injury liability do not protect your property or your body if you are at-fault in an accident. Bodily injury liability will provide compensation to the other party you are involved in an accident with to pay for medical expenses for injuries or funeral expenses in the unfortunate event that someone is ever killed in an accident that you are legally deemed at-fault.

If you have property damage liability protection, and are in an at-fault accident, the insurance company will pay for repairs or replacement of the other person's car or property. Uninsured/underinsured motorist protection works a little bit differently. Although still a liability coverage, uninsured/underinsured protection covers you if you are in an accident that is the fault of someone that has no insurance at all or does not have adequate coverage to replace or repair your possessions. To make sure you have enough coverage, it is best to purchase above the minimum requirements.

Although liability coverage is generally inexpensive, because of the very limited protection provided, that does not mean all insurance is cheap. There are several factors that play a part in determining your insurance rates, including: your personal driving record, your age, your state, and the type of car you drive. Insurance companies do reward drivers for having a safe driving record with decreased rates. You can also lower your premiums by elimination optional protections, storing your car in a garage, or raising your deductible. If you raise your deductible, you will be responsible for a larger amount upfront before the insurance company begins to pay for claims, so that is something to keep in mind. Do you want to pay more over time or pay more in the event of an accident? Regardless of the route you take to get auto insurance, just be sure you get it, not only to cover you and your family, but also everyone else out on the road because unfortunately, accidents happen.