Car insurance can get confusing. So much so, that in a recent study conducted by The Zebra, only 21% out of the 1,165 respondents surveyed would receive a passing grade on basic auto insurance information. We want you all to be informed while making choices about your car insurance coverage, which is why we’re bringing you an ultimate guide to auto insurance. In fact, it is against the law to drive without insurance in most states of The United Sates.
In our consumer guide to auto insurance, we will break it down for you from the beginning. We’ll dive deeper into the different insurance coverages, discuss how your rate is determined, and give you possible ways to get a cheaper rate so you’ll leave an insurance pro! You’ll be provided with everything you need to know about your car insurance policy- helping you make smarter, more informed choices.
Auto Insurance Guide Terms
An auto insurance policy defined by the auto control board is a legal contract between you and the insurance company. By purchasing a policy, you are agreeing to pay a premium for coverages and when you have a claim, the insurance company agrees to pay losses up to certain agreed upon limits, after you pay any deductibles. In other terms, insurance exists to “cover” or protect you from significant financial loss. Below, we’ve defined some basic terms that may be used when discussing your policy.
Monthly premiums are what you pay the insurance company for covering your risk
A claim is the notice you give to the insurance company that notifies them that a loss has occurred
Total losses are defined as when the cost to repair your car is more than the car is worth
The limits on your insurance policy recognize the maximum amount you will receive for a specific type of coverage
A deductible is the amount that you are required to pay out of pocket before your insurance pays your claim
Under the term “auto insurance” there is six different subcategories that provide different coverages for yourself, your vehicle, and the other driver and their vehicle. Typically, not all of these coverages are required to be deemed road legal in your state. After purchasing the minimum limits, you will have the option to up your limits or purchase additional coverage to make sure you’re protected. Of course, all of this comes with an added cost that may affect your monthly payment. We’ve broken down what each of the six categories covers to help you find the correct coverages for yourself and other drivers in your family!
- Liability- pays for damages your responsible for regarding other drivers and vehicles
- Comprehensive– pays for theft or damage to your car not caused by a collision (vandalism, weather, etc.)
- Collision– pays for damage caused to your car by hitting something (wall, vehicle, etc.)
- Uninsured Motorist– pays for injuries caused by a driver who doesn’t have enough insurance to cover your loss
- Underinsured Motorist– pays for injuries caused by a driver who doesn’t have enough insurance to cover your loss
- Medical or Personal Injury– pays accident-related medical bills for you and your passengers, regardless of who’s at fault
Under liability coverage falls two different types of coverage for at-fault drivers, bodily and property damage liability. Please note that liability coverage helps pay for the damages and medical expenses of the other driver.
- Property Damage Liability– pays for damage to other’s property resulting from an auto accident that is your fault
- Bodily Injury– pays for injuries that happen to others in an auto accident that is your fault
The minimum limits and required coverages vary by state—to see what’s required, choose your state from our “coverages by state.” Drivers, passengers, and pedestrians all may be eligible to receive financial benefits if injured in a covered accident.
What is not covered in my policy?
Once insured, it is important to also be informed on what isn’t covered. Although most of this is dependent on what you select, there will be some instances where your company can not offer solutions to your claim. This is why we think it is important to have full understanding of your policy and the coverages it entails. If you have any questions about your policy, it is always good to contact your insurance provider to go through your coverages and limits.
How do insurance companies determine your monthly auto insurance rate?
Most commonly, to get an insurance quote, you will have to provide some basic information about yourself. Typically, you will provide your state of residence and address, information about the vehicle you drive, marital status, and age.
The biggest factors that may play a role in determining your auto insurance rate are:
- The coverage required by your state and additional coverages or limits you select
- Your age
- The vehicle you drive
Additional factors that may affect your rates:
- Driving record
- Marital Status
- Credit History
Acquiring an insurance quote is free, fast, and easy. Although most companies use your credit score to determine your rate, Glacier will never ask or check. We believe all customers should have equal access to affordable and quality coverage. What does credit score have to do with driving anyway?
Most insurance companies offer discounts that you may apply for to help bring down your premium. One option may be to bundle your auto policy with another insurance policy, like renters or homeowners. Aside from bundling, discounts will vary based on your carrier and location, but we’ve listed some common discounts that you can inquire about when purchasing a policy!
- Paperless Discounts
- Safe Driving Discounts
- Accident-Free Discounts
- Low Mileage Discounts
- Paid in Full
- Renewal/Loyalty Discounts
- Named Driver Discounts
How to buy auto insurance?
Once you decide what coverage types and what auto insurance limits you need, you can request a quote in person through an insurance agent, by calling and speaking with an agent over the phone or you can opt to visit an insurance provider online and obtain your quote.
Quote– statement detailing the premium you will pay for the specific coverage you request
Agent– local professional paid by the insurance company to sell policies
Direct– purchase from an insurance company without the help of an agent
Driving Without Insurance
If caught driving without car insurance you could face unnecessary fines, suspensions on your license and registration depending on your state. Aside from these consequences, if caught without insurance in an accident you could owe thousands of dollars in medical bills and car repair expenses. The goal of insurance is to help protect yourself and financially recover from unplanned accidents and damage caused to your vehicle, the other person’s vehicle, and drivers.
The mandatory limits to drive where you are located are determined by your state, but most have mandatory limits in place as well as additional coverages you can select to ensure you’re covered when out on the roads.
The benefits of being insured outweigh the consequences, make sure you’re staying safe while out on the road to protect not only yourself and your passengers, but also to avoid the trouble and costs of operating a motor vehicle without the appropriate coverages.
Car Insurance Protects You and Your Passengers
Car insurance is mandatory in most states to protect yourself, your passengers, and your car while out on the roads. Although it can get confusing, we hope after reading our ultimate guide to auto insurance you feel more prepared to obtain an insurance quote to help get you back on the roads safely and legally. Make sure you have the correct limits to be legal in your state and the coverages that will make you feel protected without breaking the bank. The overarching goal of auto insurance is to protect you from financial responsibility in the chance that an accident occurs.
Glacier Insurance Company offers competitive low pricing for your auto coverage and the best part? We don’t even run your credit to give you quote, like most other big name carries. To obtain a quote by Glacier, you can visit us directly online at glacierautoinsurance.com and type in your zip code to receive a quote in 2 minutes. We also offer the ability to obtain your quote directly online, by calling one of our friendly representatives at (800) 291-3972 for assistance, or by visiting a local agent by clicking here to see where one is located nearest to you!
Still have questions regarding car insurance? Feel free to reach out to us!