Buying Car Insurance: An FAQ on Everything You Need to Know

If you are about to purchase a car, then you are going to want to purchase car insurance as well. There are a lot of things to consider when purchasing a car insurance policy. Because of this, you should educate yourself a little bit more about the ins and outs of car insurance – especially if you are a first-time car owner. The following are some of the most frequently asked questions about car insurance:

Q. Am I required to purchase car insurance by law?

A. Yes! Almost every state requires you to purchase car insurance. There is only one state that does not require car insurance to own and operate a car, and that is New Hampshire. However, if you’ve ever been involved in an accident, have been convicted of a DUI in the past or have any other serious traffic violations, then you will be required to purchase car insurance. Two other states, Wisconsin and California, don’t require you to purchase car insurance – but if you don’t, then you’ll have to prove that you have enough money to be able to cover any compensation that you are charged if you are in an accident. The type of coverage that you are required to buy in all other states varies state by state.


Q. What will my car insurance cover?

A. Most states will have a minimum requirement for liability coverage, which helps to cover the costs of repairs of any damages or medical bills for any injuries that were caused by a car accident that you were at fault for. There are a few other coverage options that you can purchase as well. These include:

.   Collision coverage – This coverage will help pay for damages done to your car or help you to replace your car if it has been totaled due to a car accident.

.   Comprehensive coverage – Any damages caused to your car that were not caused in a car accident, such as damage done by the weather or theft, will be covered by comprehensive coverage.

.   Protection against uninsured or underinsured motorists – Sometimes you’ll get into an accident with a driver that wasn’t insured or is underinsured. This coverage will help protect you financially if you are in an accident caused by an underinsured or uninsured driver that won’t be able to cover the costs of your injuries or damages.

Buying Car Insurance

.   Protection against personal injury– This will help to cover all medical expenses of you and your passengers no matter who was at fault for the accident.


Q. Will everyone that drives my car be covered by my insurance?

A. Yes, as long as the person driving your car had the permission of any of the persons that are named on the insurance policy. However, everyone that lives in your home must be listed on your insurance policy if they have a driver’s license in order to be covered by your insurance. This may seem a little tricky. Basically, if a person lives in your home and has a license, they have to be listed on your insurance policy in order to be covered if they use your car. However, if that same person does not live in your home, then they will be covered as long as they have permission to use your car.


Q. What affects how much my car insurance premiums will be?

A. There are a number of factors that your insurance company will look at in order to determine how much your car insurance premium will cost. This includes:

.   Your age – Age makes quite a difference when it comes to your car insurance premiums. The younger the driver is, the more expensive the premium will be. There’s a simple reason for this: younger drivers have less experience on the road, which means they are a bigger risk to insure.

.   Your driving record – A poor driving record will result in a higher risk for insurance companies. The more accidents you’ve been in, the more likely you are to get into more accidents. Your driving infractions are also taken into account, since they reflect on your level of responsibility on the road.

.   Your claims record – If you have a record of filing for car insurance claims, then an insurance company is going to be wary about providing you with car insurance, since odds are you’ll continue your pattern of filing for claims. In order to counter this risk, they’ll bump up your premiums.

.   The make and model of your car– Certain cars have a larger accident rate than others. Which means that car insurance companies will pay special attention to the type of car you have. If it’s a make and model known for having malfunctions or getting into accidents, then it will affect your premium negatively.

.   Where you live – Car owners that live in rural areas or in the suburbs are much less likely to get into accidents than those that live in the city – meaning that your location can affect your premiums.

.   Your credit score – If you have a poor credit score, insurance companies will see you as being less responsible and will increase your premium as a result.


Q. How can I lower my car insurance premiums?

The following are just a few of the ways that you can lower your car insurance premiums:

.   Use theft deterrent devices – Take steps to make your car more secure against theft, such as installing an alarm system, using visible wheel locks or using electronic keys.

.   Improve your credit score – Begin paying off credit debt and make sure you pay all your bills on time in order to improve your credit score.

.   Get good grades as a student driver – If you are a student driver, then getting good grades shows insurance companies that you are a responsible individual – often leading to a discount on your premiums.

.   Take driving safety courses – Ask your insurance company to provide a list of driving safety courses. Taking a driving safety course improves your abilities and knowledge as a driver, and completion of the course usually results in a reduction of your premiums.

.   Combine policies – If you purchase more than one insurance policy with the same insurance company, they will usually provide you with a discount.

.   Raise your deductible – The higher your deductible is, the lower your premium will be. Be careful though – you don’t want your deductible to be unaffordable or you’re going to have difficult getting covered for any costly damages.

Before going out and purchasing car insurance, be sure to familiarize yourself with this car insurance FAQ.