How To Understand Car Insurance

Top FAQs for How To Understand Car Insurance

Auto insurance basics—understanding your coverage | III

Category: The Basic Personal Auto Insurance Mandated By Most U States Provides Some Financial Protection If You Or Another Driver Using Your

The basic personal auto insurance mandated by most U.S. states provides some financial protection if you or another driver using your car causes an accident that damages someone else’s car or property, injures someone or both.

But to make the best decisions about purchasing other types of auto insurance coverage you might need, you’ll want to understand what’s covered, what’s not covered and what’s optional. In addition to understanding types of coverage, you’ll also want to consider coverage amounts.

Here’s a rundown of the types of coverage available—some are required; others are optional; all are priced individually (a la carte) to let you customize coverage amounts to suit your exact needs and budget.

Property Damage Liability — This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

Uninsured Motorist Coverage — Reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. You can also purchase under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.

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Car Insurance Explained: Everything You Need To Know

Some people don't understand the need for auto insurance, which can leave them personally exposed and cause significant financial problems in the event of an accident.

Some people don't understand the need for auto insurance, which can leave them personally exposed and cause significant financial problems in the event of an accident. Auto insurance is mandatory in nearly all states, except New Hampshire, which still requires financial responsibility. Here is our guide to car insurance explained to help you better understand the important of buying the right coverage.

Deductible: Your insurance deductible is what you pay out of pocket before your insurance pays anything. Your deductible applies in each claim, and your rates will be higher if you opt for a lower deductible.

Understanding your options for available types of insurance coverage is important when you are purchasing a new car or shopping around for insurance. Some coverages protect you, your passengers, and your vehicle, while others protect you if you cause injuries or damages to another party. According to Allstate Insurance, the six most common types of coverage you can purchase are:

According to Progressive Insurance, some of these coverage types are mandatory, while others are optional. Familiarize yourself with your state's insurance regulations so you can narrow down your options when insurance shopping.

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What Is Car Insurance and How Does It Work? - Policygenius

Car insurance is financial protection in case you cause an accident with your car. Learn more about what it is and how it works.

Car insurance is a type of financial protection that covers the cost of another driver’s medical bills and repairs if you cause an accident with your car, or in case your car is stolen or damaged some other way.

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Britta M. Moss, CPCU, SCLA, AIC-M, has over 25 years of insurance industry experience. In her work as a property and casualty claim consultant, she provides consultation and expert witness services in claim handling standards, practices, and norms. She has been retained by law firms representing plaintiffs and those representing insurer defendants involved in disputes or litigation regarding coverage analysis, investigation, liability determination, damage evaluation, negotiation and settlement. She is a graduate of The Ohio State University.

Car insurance protects you from paying for another driver’s injuries and repairs by yourself after you cause a collision. Some types of insurance also pay for damage to your own vehicle. To use your car insurance, you must file a claim. Once you make a claim, your company will evaluate the damage and pay a settlement up to your policy’s limits.

Most states and many lenders require you to carry auto insurance coverage. In order to keep your car insurance policy active, you’ll have to pay your monthly premiums on time. If your policy lapses, you’ll be unable to drive legally and pay more for coverage in the future.

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Before you buy car insurance, make sure you understand what the types of car insurance are

5:35 - 2 years ago

What is Travel insurance? Travel insurance is a type of insurance that covers the costs and losses associated with traveling.

Understand Your Car Insurance Policy | DMV.ORG

Learn about the common sections that form your car insurance policy.

From the car insurance coverages and limits you choose, to the cost of your premium, your policy details everything about your car insurance. Generally speaking, car insurance policies are broken up into 5 sections.

This section of a car insurance policy, also referred to as the insuring agreement, is a detailed list of the coverages and limits you and your company have agreed to be included in your policy.

An example of a common auto insurance exclusion is a named driver exclusion. This means simply that a specific driver is excluded from your policy. You don’t pay to cover him, and in return, he has no coverage to drive your vehicle.

Beware: This section has a bit more of a legal tone, so it may be harder to read. If you have any questions about the above, make sure to ask your car insurance agent.

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How to read (and actually understand!) your auto insurance policy

Category: Insurance Policy Review The Declaration Page

Investing some time understanding these important pages could save you some serious hassles after an accident.

Ashlee, a former managing editor, insurance, at QuinStreet, is a journalist and business professional. She earned an MBA in 2014 with a concentration in finance. She has more than 15 years of hands-on experience in the finance industry. Read full bio >>

At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain our editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria.

Auto insurance policies are confusing and boring documents filled with legal jargon that can be an absolute nightmare to read. Your policy is a legal contract binding the insurance company to perform specific actions under certain circumstances for an agreed upon price. Insurers want the contract to be as specific as possible, which is why policies are so detailed and written in legalese.

Resist the temptation to gloss over your insurance, because understanding your insurance policy can help avoid costly coverage gaps or frustration with your insurer after an accident. As the saying goes: an ounce of prevention is worth a pound of cure.

“The declaration page ‘declares’ what coverages you have elected to have on your policy and which you have declined,” explains Carole Walker with the Rocky Mountain Insurance Information A-sociation. “It also includes details about coverage levels, deductions, named drivers and the price you are paying for each coverage.”

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Key Terms for Understanding Car Insurance - NerdWallet

Category: Car Insurance

Tired of vague or confusing car insurance jargon? Here’s what those terms in your auto insurance policy actually mean in plain English.

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A glossary of auto insurance terms can really help you understand your policy as you deal with a claim. It can also help you compare auto insurance rates accurately as you’re shopping for car insurance.

A crash that you cause, either partially or completely. After an at-fault accident, your liability insurance pays out up to the chosen limits for other people's injury and property damage bills, plus your legal defense costs if you're sued.

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How to Read And Understand Your Car Insurance Policy Documents - DavidPope

Category: Car Insurance

Car insurance is an important investment that drivers and vehicle owners make to ensure the health and safety of themselves […]

Car insurance is an important investment that drivers and vehicle owners make to ensure the health and safety of themselves and those around them. In most states, you are required by law to acquire auto insurance coverage before driving or purchasing a vehicle. Because insurance coverage options can be complex and may vary greatly from policy to policy, understanding your coverage is not always as simple as you may expect.

If you have questions about your coverage or policy, one of the best places to look for answers will be your insurance policy documents. Understanding your policy documents will empower you to make comprehensive, cost-effective decisions regarding your car insurance coverage.

Like most types of insurance, you likely don’t think about your coverage until something unexpected happens. This mindset is common, but it’s often not the best course of action in the long run. In general, the best time to read and understand any auto insurance policy is before you find yourself involved in an auto incident. When you do this, you can feel confident that you know the facts and figures of your insurance policy before you need to use it.

While you may feel tempted to choose the least expensive policy and leave it at that — especially if you’re a first-time policyholder — you may want to consider many common coverage options. Remember, auto insurance isn’t just a legal obligation. It can provide you with crucial financial and legal protection should you be involved in an auto accident. When reading your auto insurance policy, keep an eye out for common components like limits, exclusions, liabilities, collision insurance and more.

While the exact car insurance policy documents you have will vary based on the specifics of your policy and coverage, some common components make up most auto insurance policy documents in America. These components include the following:

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How to Read and Understand Your Auto Insurance Policy | Freeway Insurance

Category: Car Insurance

Are you having trouble understanding your auto insurance policy? Here's an explanation of how to read an auto insurance policy and make informed car coverage decisions.

For those unfamiliar with car insurance, reading and understanding your auto insurance policy may feel like hard work. Even after an agent has walked you through your policy, it can still seem like too many words to bother with reading.

And, there aren’t many terms you’ll need to understand in order to make sense of your types of coverage. Many of those terms can be found in your insurance policy, the document detailing your insurance terms and conditions.

Standard insurance policy terms are common to all policies. We say standard, but there may be some differences between providers. Still, insurance policies are legal contracts and must outline specific requirements common across all providers, so look for these exact terms or something very close.

Your insurance policy will typically be subdivided into a few primary sections. Once you understand these sections, most of the mystery of an insurance policy will disappear, making you better prepared to understand your auto insurance policy protections and become a better insurance shopper.

An insurance policy’s declaration page is usually its first page. It summarizes the policy details, containing the most useful policy information so that there is no confusion about the auto liability coverages and limits, deductibles, and the policy’s effective dates. This is also some of the same information present on your wallet-sized insurance card, readily available if police should ask for it.

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How to Read a Car Insurance Policy | The Zebra

Oct 10, 2022 · Understanding car insurance liability limits. Knowing how much coverage you have is important, especially if you are at-fault in a car accident. …

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Basics to Help You Understand How Insurance Works

Category: Car Insurance

A useful guide to the basics of insurance. Learn how it works, how to get a good price, and what types of insurance you can get.

Mila Araujo is a certified personal lines insurance broker with more than 20 years of experience in the insurance industry. She currently serves as the director of personal insurance for Ogilvy Insurance where she works with some of the world's largest insurers and manages the needs of thousands of clients with the help of her broker team. As an insurance expert, has written about homeowners, auto, health, and life insurance for The Balance. Mila received the Bernard J. Finestone Award in General Insurance from McGill University in 2001.

Samantha Silberstein is a Certified Financial Planner, FINRA Series 7 and 63 licensed holder, State of California Life, Accident, and Health Insurance Licensed Agent, and CFA. She spends her days working with hundreds of employees from non-profit and higher education organizations on their personal financial plans.

Ariana Chávez has over a decade of professional experience in research, editing, and writing. She has spent time working in academia and digital publishing, specifically with content related to U.S. socioeconomic history and personal finance among other topics. She leverages this background as a fact checker for The Balance to ensure that facts cited in articles are accurate and appropriately sourced.

Learning how insurance works takes some effort, but it's vital to know the basic concepts of coverage to get what you need. Being aware of what's available and how it works can have a major impact on the price you will pay to be covered. Armed with this knowledge, you'll be able to choose the right policies that will protect your lifestyle, a-sets, and property.

At its core, the concept of insurance is very basic. When you have something to lose, and you can't afford to pay for a loss yourself, you pay for insurance. By paying money every month for it, you receive the peace of mind that if something goes wrong, the insurance company will pay for the things you need to make life like it was before your loss.

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Know How to Read & Understand Your Car Insurance Policy

Category: Car Insurance

Sep 07, 2021 · Selecting the perfect car insurance policy for yourself is important. Since you invest so much in your car then protecting it with car insurance plan is a must. While …

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11 Key Terms to Understand Your Auto Insurance Quote

Apr 26, 2022 · 3. Collision. This is probably the easiest-to-understand component of an auto insurance policy. It helps pay the repair bills when your car is damaged in a collision with …

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Things to Understand About Car Insurance - EconoTimes

EconoTimes is a fast growing non-partisan source of news and intelligence on global economy and financial markets, providing timely, relevant, and critical insights for market professionals and those who want to make informed investment decisions.

No one likes paying for car insurance, but it's necessary. If you're in an accident and don't have insurance, you could be on the hook for thousands of dollars in damages. Your license can also be suspended if you do not have car insurance. For example, if you do not have car insurance in Ohio, you can be suspended from driving for two years.

Car insurance is important because it protects you financially in the event of an accident. If you are involved in a car accident, and it is your fault, your car insurance will pay for the damages to the other car. If you are involved in a car accident, and it is not your fault, your car insurance will pay for the damages to your vehicle.

There are a few consequences of not having car insurance. The first is that you may be fined by the police if you're caught driving without insurance. The second is that if you're involved in an accident, you will have to pay for any damage to your car and any medical expenses yourself. The third is that your vehicle could be repossessed if you can't afford to pay for the damage you've caused.

Even if you have a perfect driving record, you are still required by law to have some form of car insurance in most states. The only exception to this rule is if you can prove that you are financially able to cover any damages that may occur in an accident (this is known as self-insurance).

This is another myth that is unfortunately not true. In most states, insurers are allowed to use your credit score as a factor in determining your premium rates. This is because studies have shown that people with lower credit scores are more likely to file claims than those with higher scores.

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Understanding How Car Insurance Works | Shift

Category: Car Insurance

Nov 18, 2021 · Car insurance provides a financial safety net for you, your passengers, your vehicle, and others when accidents occur. Various insurance companies, or carriers, furnish …

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How To Read an Auto Insurance Policy | Bankrate

Category: Car Insurance

Bankrate helps you understand how to read and understand your auto insurance policy.

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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.

Maggie Kempken is an insurance editor for Bankrate. She helps manage the creation of insurance content that meets the highest quality standards for accuracy and clarity to help Bankrate readers navigate complex information about home, auto and life insurance. She also focuses on ensuring that Bankrate’s insurance content represents and adheres to the Bankrate brand.

At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation of how we make money . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure .

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Understanding Car Insurance and How it Works - Guided Solutions

Category: Car Insurance

Feb 15, 2022 · A car insurance policy covers damage to your car due to sudden and unexpected events. It won’t cover wear and tear that slowly occurs over time. It also doesn’t cover standard …

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How To Switch Car Insurance In 7 Simple Steps (2022)

15 hours ago · Also, double-check that auto-payments are stopped to avoid surprise withdrawals. 6. Get Your New ID Card. Your new insurance provider should provide you with ID cards with …

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Understanding Auto Insurance | Mass.gov

An auto insurance policy is made up of different types of insurance coverages. While there are many types of coverages available, you are only required to have four: Bodily Injury to Others; …

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Understanding Auto Insurance | Freeway Insurance - Knowledge …

Understanding Auto Insurance. Understanding how auto insurance works is an important part of the auto insurance process. Most people have questions before buying auto insurance, and …

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4 Best Car Insurance Agencies in Texas You Should Know

1 day ago · Farmers Insurance. Farmers Insurance is the best option if you are looking for a budget-friendly option without compromising quality. Their premiums for minimum coverage …

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