Purchasing or leasing a car is a substantial investment, and it's critical to protect it. Having car insurance is the best way to financially protect yourself and your vehicle. If you're in an accident, or your car is stolen or damaged, car insurance will help cover the costs.
In the United States, every state has its own minimum liability insurance requirement. Is it enough, though? Is there any other alternative? Learn how automobile insurance companies work and the various forms of coverage they provide in the sections below.
What is car insurance?
An auto insurance policy is a legal agreement that binds you to the insurer and provides coverage in the case of an accident or theft of your car. Once you get your car insurance quote and pay a premium, the insurance provider promises to cover your losses as specified in the contract.
The following are some of the things that car insurance may cover:
- Theft or damage to your personal property
- Liability- The legal obligation you have to others if you cause harm or damage to their property.
- Injuries, rehabilitation, and even lost pay and funeral costs are considered medical expenditures.
We understand that not everyone needs the same car insurance coverage. That's why we offer a variety of coverages and options to choose from, so you can get the protection you need at a price that fits your budget.
What are the terms of my car insurance policy's coverage, and when does it apply?
If you or another family member is driving your vehicle, your auto insurance will provide coverage (with their permission). If you give consent to someone who is not listed on your insurance to drive your automobile, your policy may cover them as well.
Your automobile insurance does not cover you when you're not in your car. Whether commuting to work, going about errands, or taking a road trip, your vehicle coverage only protects you while you're behind the wheel.
It is important to know that some policies will not cover you if you use your automobile for commercial activities, such as delivering pizzas. Using a ride-sharing service like Uber or Lyft may void your motor insurance policy since these services are not covered. However, supplemental ride-sharing insurance is now being offered by several motor insurers (at an extra fee) to vehicle owners who provide ride-sharing services.
Is it necessary to get car insurance?
Different states have different minimum standards for auto insurance. Additionally, your lender may have restrictions if you are financing a vehicle. Car owners in almost every state are required to carry:
- Bodily injury liability: covers you when you or another driver inflicts an injury or death while operating your vehicle.
- Property damage liability: If you or another driver driving your automobile causes damage to another vehicle or other property, you or the other driver will be reimbursed for the damages.
- In many states, you must also carry: Insurance coverage that reimburses you and your passengers' medical bills in the event of an accident. Loss of pay and other expenditures will also be covered.
- In the event of a hit-and-run or an accident caused by a driver who does not have car insurance, uninsured motorist coverage offers reimbursement. You can also purchase an underinsured motorist policy to cover the expenses of a significant accident when another driver does not have appropriate insurance.
Even if your state does not require it, PIP and uninsured/underinsured motorist coverage are always recommended.