A Consumer’s Quick Guide to Auto Insurance

Having access to a consumer’s quick guide for auto insurance puts you ahead of the curve. It offers you valuable information at your fingertips as a useful starting point. This guide will help you understand the different types of auto insurance and how to get affordable premiums.

Car Insurance vs. Non-owner Insurance

There are various types of car insurance, so let’s look at some common options. Auto insurance involves paying a monthly premium and then getting coverage benefits if an accident occurs. These benefit payment amounts depend on various factors like the type of coverage and accident details. It pays up to the policy’s limits, such as $100,000, for injuries to you, your passengers, and others.

Non-owner insurance is for motorists who drive vehicles they don’t own. The coverage is limited to what the state requires, such as insurance for bodily injury, medical bills, and personal property liability. You may need this insurance if you regularly rent vehicles or frequently borrow someone’s car. Your rate will be based on the same factors as drivers who own their cars, such as age, driving record, and zip code.

State Auto Insurance Requirements

Each state has its own laws about auto insurance requirements. A common theme throughout all states is drivers must carry minimum levels of bodily injury and personal property liability coverage. In other words, all drivers must at least carry insurance to cover for the damages they cause to others. The amount of this required coverage varies among states.

It’s up to each driver to choose minimal or full coverage policies. In auto insurance language, the first two numbers of a “25/50/25” plan mean the driver is covered up to $25,000 for bodily injury medical expenses to the victim. The “50” represents $50,000 in bodily injury coverage when more than one person is injured. The final “25” means you have up to $25,000 in personal liability coverage to repair or replace the victim’s vehicle or property.

Insurance Cost Factors

The cost of auto insurance is different for every driver because it depends partly on their driving record. Drivers with clean records pay lower rates, while drivers with violations and accidents pay higher premiums. The insurer determines the risk levels of all drivers by considering their annual mileage, driving experience, and other factors. The driver may pay higher rates due to driving an older vehicle, living in a high crime area, or having poor credit.

The policy deductible is another consideration when searching for the right policy. The deductible is the amount you pay out of pocket before your policy kicks in for a claim. The lower your deductible for your monthly premium, the more you will pay upfront at the time of the claim. Other factors that affect rates include age, gender, and marital status.

The average annual cost of insurance for drivers in the United States is $1,005, according to a recent National Association of Insurance Commissioners study.

Types of Auto Insurance Coverage

  • Bodily Injury Liability – pays victims’ medical bills for accidents you cause.
  • Collision – pays to repair or replace your vehicle when you cause an accident.
  • Comprehensive – pays for losses from disasters beyond collisions, such as storm damage, theft, or vandalism.
  • Medical Payments – pays you or your passengers for sustained injuries.
  • Personal Injury Protection – pays for medical expenses and funeral services.
  • Personal Property Liability – pays to repair or replace property damage you cause.
  • Uninsured and Underinsured Motorist – pays medical bills and repair costs if you are involved in an accident with an uninsured or underinsured driver.

How to Shop for Auto Insurance

Since insurance companies price their policies differently, it pays to shop around to find the best car insurance deals. Most credible insurance companies can give you free quotes on their websites or by talking with an agent on the phone. It’s best to get at least three or four quotes before you decide on an insurance company policy. Don’t be afraid to ask an insurer if you are eligible for any discounts.

Another consideration is how seamless the process is to file a claim. Does the website allow you to upload documents or images easily? You should avoid a website that uses clunky old technology. The more modern and user-friendly the site is, the more it might be worth exploring. You definitely want to avoid fly-by-night operations that don’t expect to be in the business for a long time.

The next step in the selection process is to read online reviews about each insurer to learn satisfaction rates among their policyholders. You can also learn about the company’s reputation and financial state by reading reports published by J. D. Power. Finally, you should call insurers that make your list of finalists and ask questions to see if their agency fits your budget and specific coverage needs.

Managing Risk

The key to getting the best auto insurance rates is reducing your risk of causing an auto accident. You can lower your risk by driving less, driving defensively, and practicing proactive safety measures such as staying within the speed limit.

Many drivers are starting to install telematics devices in their vehicles that measure driving behaviors. These devices communicate directly to the insurance agency, relaying how safely the motorist is driving. The use of telematics can help drivers focus more on the road and avoid distractions.

Every driver needs to find their own customized auto insurance policy that fits their needs. Some people drive more than others, which is one of the reasons rates vary. The more you can demonstrate to your agent you’re a safe driver, the more opportunities you’ll have to lower rates.

Do you have any questions when it comes to your auto insurance policy? Call the professionals at Kneller Agency today to get started on quality coverage you can count on. As an independent agency, we work for you, getting you the best price and coverage from among our many providers. We work with motorists in Chatham, Copake, Valatie, and neighboring communities in New York. We look forward to hearing from you.

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