Car insurance is an agreement between you and an insurance company. You agree to pay the premium, and the insurance company agrees to pay your losses as defined in your policy. This simplified explanation doesn’t give travelers much to go on, and it can become overwhelming to try and understand what you’re paying for and what you’re getting.
Most people buy car insurance for one of two reasons: to meet state laws requiring a minimum liability coverage (I ran into this issue while renting a car in California for our trip to Joshua Tree) or to protect themselves and their cars from financial losses resulting from car accidents.
The third reason to buy new insurance is that it’s part of the requirements to carry full coverage when you finance a car purchase. In this case, you often need to get insurance quickly. We will discuss how to get car insurance and the key terms you’ll need to understand when choosing your coverage.
Types of Car Insurance Coverage
There are six types of coverage in most car insurance policies: bodily injury liability, property damage liability, collision, comprehensive, personal injury protection (PIP), and medical payments. Here’s a quick rundown of each:
Bodily injury liability
This coverage pays for the medical expenses of people injured in an accident that you cause, and it also covers any legal fees if you’re sued over an accident.
- Property Damage Liability: This coverage pays for damage to property, such as cars, buildings, and fences, that you cause in an accident.
- Collision: This coverage pays for damage to your car caused by an accident, regardless of who is at fault.
- Comprehensive: This coverage pays for damage to your car caused by events other than collisions, such as theft, fire, or weather.
- Personal injury protection (PIP): This coverage pays for your medical expenses and lost wages if you’re injured in an accident, regardless of who is at fault.
- Medical payments: This coverage pays for the medical expenses of people injured in an accident that you cause.
The amount of coverage you need depends on several factors, including the value of your car and the amount of risk you’re willing to take. It would help if you talked to your insurance agent or company about the amount of coverage that is right for you.
How to Find the Best Rates Now
The best way to find the best rates is to shop around and compare quotes from multiple insurers. You can do this easily online by using an online insurance comparison tool. Once you choose the best monthly payment rate with the appropriate coverage, you can process the payment and get a copy of your proof of insurance almost instantly sent to your email.
You can choose to download the app for the company you choose. If you decide to carry the company in your pocket on your phone, you’ll have access to the payment and claims portal as well as your proof of coverage in digital format.
Tips to Reduce Your Premium
Remember that the cheapest option isn’t always the best for your needs. However, once you’ve narrowed down your choice of insurance coverage, you can work with them to find every discount you qualify for to help you bring your rate down to a reasonable level.
Increase Your Deductible
A deductible is the amount of money you pay before your insurance company starts to pay for a covered claim. A higher deductible means a lower premium because you take on more financial responsibility if you have an accident.
Remember that you’ll need to have enough money saved to cover your deductible if you have an accident. A good rule of thumb is to have at least $1,000 saved up for this purpose.
Ask About Discounts
Most insurers offer various discounts that can help you lower your premium. Some typical values include:
- A multiple policy discount is available if you have more than one type of insurance with the same company
- A good driver discount if you have a clean driving record
- A safe vehicle discount if you have certain safety features in your car
- A low mileage discount if you don’t drive very much
- A mature driver discount if you’re over a certain age
- A good student discount if you’re a full-time student with good
Good Driver Programs
Some insurance companies offer a discount for allowing them to track your driving habits, either through a tracker added to your car’s computer system or through a tracker on your phone through their app. After a period, a safe driver discount may be added to your policy, sometimes as a credit on your bill.
Daily Drive or Road Trip Adventure
Whether you’re searching for insurance for a new purchase, looking for a better rate on your current insurance, or preparing for a road trip adventure, finding insurance that works for you is vital to your safety and peace of mind.