If you want to drive your car in any of the states in these United States you have to have some form of auto insurance.
Some insurance companies think of most of us as statistical components of the business they are making money in. You may have to self-educate yourself on the types of auto insurance available, so you can choose which is right for you.
We are usually placed in one “pool” or the other by the insurance executives who figure out how much someone is going to cost them and then they charge a rate which is based on this placement.
Your auto insurance policy will typically have several different parts, corresponding to the different types of insurance. The types of insurance your state requires you to have are what you will need to sign up for and then you can add the extra ones you want to them.
Most states will require some kind of Bodily Injury insurance. If you are involved in an accident and someone else is injured, like the other motorist, a pedestrian or a passenger in your car, this type of insurance covers the claim.
You probably will want to add some liability or property damage coverage to your policy. Damage done to property in an accident will be taken care of by this insurance coverage. Most states will require you to carry enough to cover something like $10,000 to $15,000 of property damage, but you may want to consider getting more coverage.
Collision insurance covers damage to your own vehicle if you cause an accident, but if your car is over five years old, you might not need this. The cost of repairs has to be compared to the cost of the premiums. Financing a new car requires you to get at least a minimum level of collision coverage.
Comprehensive insurance covers damage to your car from things other than an accident with another vehicle. That sort of damage may be fire, vanalism, storm damage or that caused by a deer on the highway.
This type of insurance coverage may not be necessary if your car is older and not worth too much any more. Newer or recently financed vehicles will likely require this coverage.
If you are involved in an accident with an uninsured or under-insured motorist, there is insurance coverage that takes care of you. All people are supposed to get auto insurance prior to driving, but some sidestep this law, so insurance companies introduced their uninsured motorist coverage.
Those are the major categories of auto insurance. You’ll need to confirm what your current state requires, and determine whether you need all of those kinds of insurance for your vehicle based on its age, worth and likely repair costs.
Many times you will be able to reduce your premiums by a significant amount by increasing the deductibles in things like collision coverage and then keep enough reserve cash to cover the deductible.