Auto insurance is mandatory in most parts of the United States. In those states, it’s illegal to drive a vehicle on public roads unless you have auto insurance. It’s a protective measure to reduce the number of court cases involving car accidents.
In most cases, the minimum amount of coverage allowed is liability coverage. It pays some expenses of victims when you cause an accident. The insurance company will pay for medical bills and damages for the victims, but not for you. You’ll need additional coverage such as comprehensive or collision coverage to cover your expenses. This coverage handles events such as accidents, vandalism and theft.
To keep the insurance policy active, you pay a premium every month. Failing to pay the premium will result in cancellation of your policy. The amount of your premium depends on your driving record and the model and age of the vehicle. If you have a bad driving record, then you’ll likely pay a higher premium. The same is true for having a newer model car. In most cases an older vehicle will result in a cheaper premium.
You’ll pay the same premium every month. But paying the entire premium at once is also an option. When you’re in an accident, you have to file a claim with your insurance company. The company will verify your claim, and then either deny or approve the claim. If the claim is approved, you’ll have to pay a deductible before you get any money from the insurer. The deductible varies, and can range from $250 to several thousand dollars.
Discuss the details of your policy with your insurer. Make sure you’re aware of what is covered and how to file a claim.