7 Common Car Insurance Questions Answered
Did you know the auto insurance market is worth $310 billion? This means there are a lot of drivers on the road! With all of these drivers, it’s integral to have the best car insurance. The right car insurance policy will ensure you’re protected financially in case you're in an accident.
However, there’s still a lot of confusion about car insurance. For example, cheap car insurance may not be the best option, but there's no need to pay for expensive insurance if you qualify for discounts. Understanding the basics of car insurance will help you find the best policy and could even save you some money.
Here are 7 car insurance FAQs that everyone should know.
1. Do I Need Car Insurance?
Car insurance is mandatory in every state. You cannot legally drive without proving you have financial responsibility for any damages. What does this mean? Car insurance helps pay for any damages sustained in a car accident, such as vehicle damage and medical bills.
However, every state has different car insurance requirements, which we will cover more in another section.
What if you’re uninsured and are still driving? You face some serious consequences. The penalties vary from license suspension/revocation, hefty fines, and even imprisonment.
2. What If I Sold My Car or Don’t Drive Often? Do I Still Need Car Insurance?
The answers to these questions vary, so let’s tackle them individually. If you sold your car, you obviously don’t need insurance.
However, many people still choose to invest in non-owner car insurance. If you drive a car that isn’t yours, you’re still covered for property damage liability and even bodily injury. This will come in handy if you still plan on driving rental cars or if you borrow a car from your family or friends.
In addition, there are risks with canceling your car insurance. If there’s a pause in insurance coverage, your premiums may increase when you sign up for a new policy. Some insurance companies may deny your application because you hadn’t had continuous coverage.
What if you own a car and never drive it? This is common for people who often take public transportation and only drive their car occasionally. Auto enthusiasts may also buy cars to upgrade and repair them, mainly keeping the car in storage.
In these scenarios, you’ll still need car insurance. But you can get away with only the bare minimum coverage in your state. This brings us to our next point.
3. Can I Only Get the Minimum Car Insurance Required by My State?
It’s tempting to go for bare minimum car insurance. You’ll pay lower premiums and will still have enough protection to satisfy your legal insurance requirements.
However, this may not be the smartest move in the long run. If you get in a car accident, you won’t have as much protection. This means you’ll end up paying for most of the damages and medical costs.
The stakes increase if the car accident was your fault. In that case, you’ll have to cover the damages and medical costs for the other party. If you can’t pay them, your assets may get seized or the other car owner may sue you.
As stated previously, if you never drive your car, you may get away with bare minimum car insurance. But this isn't the general recommendation for the average driver.
4. How Much Does Car Insurance Cost?
The premiums you’ll pay vary on different factors. As stated previously, every state has different insurance requirements which will affect the cost of your premiums.
All car insurance companies also judge premiums by individual factors. These include your driving history, age, past driving history, the type of car you drive, where you live, how often and where you drive, and more.
This doesn’t mean car insurance has to be expensive. Before paying for car insurance, you can conveniently compare car insurance quotes online to find the best policy for the best price.
5. Can I Get a Discount on Car Insurance?
Absolutely! Several car insurance companies offer various discounts. For example, if you don’t have a negative driving record, many insurance companies will give you a discount. Some car insurance companies may even offer a discount for students who get good grades.
Other common car insurance discounts include:
- Customer loyalty
- Proof of driving training
- Being a part of a group, such as an alumnus for your college
- Getting insurance through your employer
- Auto-pay, pay insurance in full, or switching to paperless statements
- You drive a specific vehicle, such as a hybrid
- You renewed your policy early
When you sign up for a policy, always ask the insurance agent what discounts they offer and if you qualify for any of them. If you get quotes for car insurance online, you may also discover any discounts you qualify for.
6. What Information Do Car Insurance Companies Need From Me?
When you sign up for car insurance or request a quote, the car insurance company will request information from you. This includes where you live, how often you drive, your credit score, marital status, and more.
The information requested depends on the auto insurance company and the state you live in. But understand this information is important, even if it seems random. For example, some areas are more prone to accidents or theft, so car insurance premiums increase when you live in certain areas.
7. What Else Can I Do to Lower My Insurance Premiums?
Unfortunately, you don’t have much control when it comes to your insurance premiums. But other than discounts, there are some things you can do to lower your insurance premiums.
The best thing you can do is improve your driving record. Past accidents and vehicle citations can increase your insurance premiums. Stay alert behind the wheel and avoid driving during the busy hours of the day.
You can also refrain from paying expensive premiums altogether by comparing auto insurance quotes. You can easily do this online.
Get a Car Insurance Quote Today
If you need car insurance, the best first place to start is by searching for car insurance quotes. All you need to do is search your zip code to receive your personalized quote. We look forward to hearing from you!