Why do people need car insurance?
By now, you might have heard of different stories regarding insurance claims. Some incidents are straightforward: A vehicle crashed into another vehicle, while others can seem funny, odd, or probably unbelievable. Stories involving animals like bears, horses, or even dogs causing vehicle damages are hilarious at times, while tragic ones can cause anxiety and paranoia. That alone is compelling enough for one to get one for themselves. You’ll never know when it will come in handy. It essentially protects you, others, and your property from any form of harm.
In this crazy world, it’s just impossible to foresee what could happen. Whether it’s at home, at work or on the road, there are endless possibilities on how misfortune could come your way. Conclusively, we all try to protect ourselves. In the United States alone, there are 6 million car accidents where an average of 90 people die from every year. 3 million get car-related injuries, with 2 million surviving with permanent disabilities. This overwhelming fact released by the Driver Knowledge for the year 2020 can create immense anxiety for car operators and owners. Which makes you think, what if I step inside my vehicle and a careless biker comes across? Or what if my brakes accidentally become faulty and I hit the car in front of me? In reality, these incidents can cost you thousands and a full-on headache. So why not just get a car insurance, and have someone back you up along the way?
What is a car insurance?
What exactly is a car insurance? Let’s make it simple. Car insurance is an agreement between you and an insurance company to protect you (up to a certain extent) from financial loss should a vehicle-related accident, theft, or misfortune happen. In turn, you are required to pay a premium in relation to your specified vehicle. Car insurance provides coverage for the following:
- Property: This accounts for damage done to your car in case of an accident or theft.
- Liability: This pertains to legal and financial responsibilities arising from human/bodily harm/injury and/or property damage.
- Medical: This covers costs related to injuries, rehabilitation, funeral, and other similar expenses.
Premium payments highly depend on each individual’s profile in consideration of age, gender, driving experience, and accident history to name a few. All states except New Hampshire require car insurance. This is to ensure the protection of everyone’s welfare.
Things to consider when getting car insurance
When getting yourself a car insurance, you might be wondering where to start. You might want to ask yourself the following questions:
How big or small will my coverage be?
While most states technically require just a liability insurance, you might want to check other possible coverage as well:
- Collision Insurance: This will cover car repairs regardless of who is at fault. Rule of thumb is to always check your car’s value in relation to the required deductible fee. Let’s put it this way: If you have a deductible fee of $1,000 for a $5,000 car, it means getting a payback of $4,000. Now if you have a $1,000 deductible fee for a $50,000 vehicle, it means getting a payback of $49,000. Deductible fees can lower your insurance premium. Weigh your options.
- Comprehensive Insurance: This covers damages resulting from other incidents like fire, acts of nature, theft, or even vandalism. This also entails a deductible fee so it’s wise to see your options as well.
- Motorist Protection: This covers car repairs should an uninsured (UM) or underinsured (UIM) party cause the damage. This doesn’t have a deductible fee. Rather, it gives you a specified amount you could possibly collect.
- Personal Injury Protection: This covers medical expenses and/or wages you or your passengers incur after the accident. Similarly, this will also protect you should you be riding in another person’s car.
Will my car affect my policy?
Always keep in mind that costs for repairing a car is dependent on the car model and make. In other words, your car would determine how much your monthly insurance will be. Suffice to say that insurance payments for a Prius would most likely be different from an insurance payment of a Tesla. The more fancy the car is, the “fancier” your insurance policy will be as well.
What are my payment options?
When exploring payment options, you might want to go over possible discounts. Ask your agent if there’s one available since some could qualify you for simply having an alarm, insuring an eco-friendly vehicle, or having a good driving record (yes, it pays off to be a good driver). Consider it as incentives for being a great citizen.
Depending on the insurance company, payment options can be monthly, quarterly, bi-annual, annual or lump sum. Depending on your capability, always keep in mind that “more frequent” payment options such as those that go monthly will factor in higher surcharge as compared to an annual or lump sum payment.
Is customer service important?
The goal here is to have someone stand by you when faced with unfavorable circumstances. An accident in itself can already induce so much stress. You wouldn’t want to add more to that when trying to get what is due to you. There are instances when filing a claim can get pretty intense, say requiring a terrible amount of documentation before getting that approval, or delays in processing. Make sure you check on their process flow, requirements, and customer hotline, to manage expectations.
In the United States, everywhere except in New Hampshire requires a minimum car insurance coverage. This is to ensure that car owners will have financial responsibility for future car related liabilities caused by vehicular damages or accidents. Similarly, it also gives protection from man-induced damages and natural disasters.
When getting yourself a car insurance policy, we always want the best coverage. But keep in mind that every coverage corresponds to cost. Most people consider this an added burden, but it can actually save you a lot (of money, and reduce your stress) when accidents come about. Check your capabilities and ask your agent to help you find one that suits you.