Auto Insurance Coverage for Personal Cars and Trucks
Owning a vehicle, no matter how often you drive it, likely means you need car insurance. Most people, experts or not, would agree that driving without auto insurance is simply an irresponsible act. In fact, many states consider it unlawful for motorists to operate vehicles without mandatory minimum insurance, so uninsured drivers risk facing considerable fines if caught driving without required coverage. Car finance and leasing companies may include auto insurance provisions in the repayment agreement requiring the registered owner maintain minimum coverage on the vehicle equal to at least the current payoff amount on the loan.
An auto insurance policy provides protection in some combination of collision, liability, theft, and related coverage(s) to protect you, others, and your car:
Auto Coverage Options
- Bodily Injury Liability
Bodily injury coverage protects those injured in an accident caused by you. Most states mandate you have this coverage on your personal vehicle.
- Collision Coverage
Collision coverage protects your vehicle in case it is damaged in an accident. This coverage may be mandated by your lender.
- Comprehensive Coverage
Comprehensive coverage protect your cars from non-accident events such as damage cause by wildlife.
- Medical Payments or Personal Injury Protection
Covers medical costs to injured parties. These types of coverage may be required if you reside in a “no-fault” state.
- Property Damage Liability
Property damage covers damage to another party’s property including their vehicle, home, etc.
- Replacement Value Coverage
Optional coverage that will pay for replacing your vehicle instead of the depreciated value.
- Uninsured and Underinsured Motorist Coverage
This coverage protects you in case the at-fault party does not have insurance or their coverage limits are too low to compensate you.
- SR22/FR44 High Risk Coverage
For certain violations, the state will require your insurer to submit this form in order for you to regain driving privileges.
Auto Policy Discounts and Rate Determination
Auto insurance carriers may use a combination of rating factors to determine a policy price and discounts, including but not limited to:
- No Car Accidents or Claims Past 3-5 Years
- No Moving Car Violations
- No Lapse in Insurance Coverage
- Credit History - get a free Annual Credit Report to check how your report may impact your car insurance rate
- Driver Education and Safety Courses
- Owning your motor-vehicle and/or home
- Vehicle Safety Rating - see how your car’s safety compares
- Anti-Theft Devices
- Location Car is Parked or Driving Mileage
Important Considerations for Insured Drivers of Cars and Trucks
You should evaluate your car insurance needs when you move. A new state means new regulations and coverage limits, but even moving to a different zip code down the street can mean changes to your premiums.
Marriage means that you and your partner may potentially save on insurance by bundling. If one partner has a less-than-stellar driving record, then it may benefit the parties to have separate policies.
Teen Driver Insurance is more affordable than you think. Keep your young driver on your policy, get her a personal policy, or check out more options.
Auto insurance policies do not cover vehicle damage that occurs prior to start date of the policy. If you buy a used vehicle, it is your responsibility to be aware of any previous damages from accidents or other types of disaster. CarFax is a trusted service that reports on a vehicle’s damage history and maintenance records.
If you do not own a vehicle, but often rent cars, you may find that a personal policy will provide a savings over the auto insurance rates charged by car rental companies. ZipCar is excluded from this however, because auto insurance coverage has already been included into their membership program for rental car drivers.
Personal auto insurance or car insurance typically does not cover liability or damages when using the vehicle for business or commercial purposes. There are a few instances, such as using a car or truck for pizza delivery, which some auto insurance companies do cover within the parameters of the insurance policy. Verify the terms and conditions in your policy documents. When in doubt, ask the auto insurance agency (insurance carrier) that issued the policy for your car. Our advice: “Get it in writing first!”
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