When purchasing auto insurance, you have several options. You can obtain it directly from an insurance company, consult an agent, or use an online insurance marketplace.
Determining the right amount of coverage is crucial. In 2020, medical expenses from fatal accidents amounted to over $537 million. It’s wise to get as much liability coverage as you can afford to avoid being financially burdened after an at-fault accident. A typical full-coverage policy includes:
Liability Coverage
This covers accident-related costs, including damage to others’ property, and is typically divided into bodily injury liability and property damage liability.
Personal Injury Protection (PIP)
Also known as no-fault coverage, PIP covers medical expenses and rehabilitation for you and your passengers, as well as other related expenses such as lost wages.
Uninsured/Underinsured Motorist Coverage
This covers costs if you’re involved in an accident caused by a driver who is uninsured or underinsured.
Collision Coverage
This covers damage regardless of fault.
Comprehensive Coverage
This covers various non-driving-related damages, such as those from extreme weather, falling objects, fire, vandalism, and theft.
Gap insurance
In case your car is totaled, it bridges the gap between the car’s actual cash value (including depreciation) and the amount you owe on a loan or lease.
Each state has minimum insurance requirements, which are usually insufficient in major accidents. When applying for insurance, you’ll need information on all drivers in your household, their birthdays, driver’s license numbers, and Social Security numbers. You’ll also need Vehicle Information Numbers (VINs) or make and model years for all vehicles, your address, and your previous insurance policy’s declarations page.
Your answers to certain questions during the application process may earn you discounts. You’ll also set your coverage limits and deductible amounts for comprehensive and collision coverage.
When comparing insurance quotes, be cautious about unnecessary add-ons. You don’t have to make a minimum deposit, but your first payment is expected upfront.
Getting quotes from several insurance companies is a wise move. Consider both protection and customer service when selecting an insurer, in addition to cost. Policy needs may vary for families and single adults.
Once you’ve compared quotes and selected an insurer, it’s time to purchase your policy. You’ll set a start date and pay your first premium. Your insurer will provide proof of coverage and a welcome package.
